US, Allies Ban Russian Banks From SWIFT, Crypto Maybe Next Target

Move would isolate Russian businesses from the world

The US has joined Canada, the EU and UK in barring some Russians from the international money transfer system, SWIFT. The move is the most serious round of sanctions yet from Western nations over Russia’s actions in Ukraine, with Ross Delston, a U.S. lawyer and former banking regulator, calling it “the closest thing to a declaration of war from a financial perspective.”

“It’s going to result in Russia being viewed as radioactive by U.S. and EU banks, which in turn would be a major barrier to trade with Russia,” he continued. Cutting Russian banks off from SWIFT will make financial transactions more costly and difficult.

The weekend decision is expected to cause market volatility Monday, as financial analysts were beginning to anticipate a less intensive sanctions campaign from the West. “A lot of traders were kind of becoming convinced that the U.S. and Europe were not taking a hard stance,” said Edward Moya, senior market analyst at OANDA, a foreign exchange broker. “This action will be really difficult to digest and it will really pick a nerve for a lot of investors.”

While investors aired concerns over the move, it was welcomed by the Ukrainian government, with Prime Minister Denys Shmyhal tweeting that it would paralyze “the assets of Russia’s central bank.”

However, Kiev also complained that the sanctions are limited to select banks and will not target the Russian economy as a whole. “I will not be diplomatic. Some countries are trying to leave loopholes, exclude a number of banks so they can apply some measures with their left hands and continue to trade with Russia with their right hands,” Ukraine’s Foreign Minister Dmytro Kuleba said.

Western states present the sanctions as a tool to punish the Russian government. However, sanctions often have little impact on state institutions or senior officials and instead cause suffering among the general public. Further, the SWIFT sanctions are also expected to have consequences for Western economies.

Michael Farr, CEO of a DC-based investment firm, warned: “The issue will be the inflation that gets caused here, and the extent to which it can really slow the European economy.”

While cryptocurrencies offer a potential method to bypass SWIFT for international money transfers, the White House is now seeking to block that avenue and punish the millions of Russian citizens who use digital currencies, according to a report in the Wall Street Journal.

Kyle Anzalone is the opinion editor of, news editor of the Libertarian Institute, and co-host of Conflicts of Interest.