Key facts:
Western allies want to prevent Russia from moving its international reserves.
Iran, China, and Venezuela have all turned to cryptocurrencies to circumvent international sanctions.
The United States, Canada, the United Kingdom, France, Germany, Italy and the European Union issued a joint statement yesterday condemning Russia’s military invasion of Ukraine. In it they agreed to expel the “selected” Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
SWIFT was born in 1973 as a cooperative group that helped establish a common language for financial transactions. It is a shared data processing system and a infrastructure to which most of the world’s banks are affiliated, like what details the Economipedia site.
For a long time, blocking the SWIFT network to certain affiliates has been considered an extreme option, although today it is a measure that is already underway, while the war between Russia and Ukraine continues.
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In the statement jointly, the Western allies said that the new sanctions will be implemented in the coming days. Which is raised is “to prevent the Russian central bank from deploying its international reserves”.
“We are committed to ensuring that certain banks in Russia are removed from the Swift messaging system. This will ensure that these banks are cut off from the international financial system, disrupting their ability to operate globally.”
Joint statement released by the White House, and signed by Canada and the United Kingdom.
The expulsion of Russian banks from SWIFT will prevent them from conducting financial transactions with the rest of the world, while Russian imports and exports will be blocked.
The move will also prevent Russia from “using war funds” by crippling its central bank, freezing its transactions. And, on the other hand, the country’s Central Bank will also not be able to liquidate its financial assets, nor use them in Western markets.
Will Bitcoin be able to help Russian banks kicked out of SWIFT?
Some analysts and connoisseurs of the blockchain ecosystem, consulted by US media, see Bitcoin and other cryptocurrencies are unlikely to help Russia circumvent international sanctions.
According the reportsAlthough it is true that Bitcoin is used, now more than ever, to move money around the world without the help of traditional banks, it does not mean that cryptocurrencies favor Russia at the moment to protect its assets.
“The fact is these sanctions are going to be potentially crippling and could get more crippling, and there is nothing crypto can do about it,” said Ari Redbord, head of legal affairs at TRM Labs, a crypto compliance firm.
As CriptoNoticias has reportedIran, China and Russia, together with Venezuela, bet on technology associated with blockchain as a means of circumventing sanctions and countering the financial might of the United States. However, the question remains as to how much this alternative has helped them?
In the particular case of Russia, a sharp turn towards cryptocurrencies will not do it much good. The main reason is the radical transparency with which transactions are handled on public blockchains, like Bitcoin.
When transacting with Bitcoin or other cryptocurrencies, individuals or States will be exposed to being sanctioned with serious potential consequences. According to the analysts consulted, it must be borne in mind that exchanges have surveillance systems that are capable of revealing everyone’s identity.
Currently, the blockchain analysis firm, Chainalysis, has its own transaction tracking tool known as Chainalysis KYT that has been made available to the different exchanges and platforms that need to adhere to the regulation. Quite criticized, it must be said, because it calls into question the right to privacy of users.
In fact, Salman Banaei, head of public policy for North America at Chainalysis, believes that instead of using Bitcoin or any other cryptocurrency, Russia will surely lean towards traditional forms of money laundering, with shell companies and shady banks. He said that a second more attractive option than cryptocurrencies would be to try to launder money through another traditional foreign currency, such as the Chinese yuan.
