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Some are calling it the US “secret nuclear weapon”: As Western governments threaten Russia with an unprecedented package of sanctions aimed at deterring President Vladimir Putin from ordering the invasion of Ukraine, a special measure, says CNN has planted panic in the heart of the Kremlin: the country’s secession from the global banking system.
U.S. lawmakers have suggested in recent weeks that Russia could be removed from SWIFT, the high-security network that connects thousands of financial institutions around the world.
Senior Russian lawmakers responded by saying oil, gas and metal shipments to Europe would be blocked if that happened. “If Russia breaks away from Swift, we will not receive foreign exchange, but buyers and European countries in the first place will not receive our goods – oil, gas, metals and other important components,” said Nikolai Zhuravlev, deputy chairman. of the upper house of the russian parliament.
SWIFT, or the Global Interbank Financial Telecommunication Company, was founded in 1973 and is now used by over 11,000 financial institutions to send secure messages and payment orders.
Without any other universally accepted alternative, it is essential to global finance. Russia’s removal from SWIFT would make it almost impossible for financial institutions to send money in or out of the country, causing a sudden shock to Russian companies and their foreign clients – especially buyers of oil and gas exports in US dollars.
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