Ukraine is facing war, and everyone is interested in blocking Russia from SWIFT.
But not everyone understands what SWIFT is and why it is essential for countries like Russia.
|What is Swift? And Why does SWIFT matter to Russia?: eAskme|
If you also do not know What SWIFT is and why it matters, then here is what you must know.
Society for Worldwide Interbank Financial Telecommunication, also known as SWIFT, is a highly secured professional messaging service.
It is reported that more than 11000 financial institutions and banks are using SWIFT to communicate with each other.
In easy words, you can call SWIFT a Gmail of the global banking system.
Since countries are putting sanctions on Russia, SWIFT has become the hottest topic.
Now EU and USA want to ban Russian banks from SWIFT to stop Russia from using international financial services. This will put some pressure on the Russian government.
How does SWIFT work?
SWIFI was introduced in 1977. Since then, banks and other financial institutions have been using SWIFT to make payments, confirm orders, and many other financial transactions.
In Europe, countries use SWIFT to pay for the oil and gas from Russia.
It works as a money transfer service across countries.
Why are some countries not interested in blocking Russia from SWIFT?
If countries block Russia entirely from SWIFT, it will also hurt their economies.
Because SWIFT is the only way, many countries pay Russia to buy gas and oil.
What is happening now?
Countries have already banned some big Russian banks from SWIFT, which will not hurt European countries.
Debate is still on if Countries should ban Russia completely from SWIFT.
But most media houses or publications talking about the SWIFT ban do not understand the economic pressure on every country.
This is why countries are holding up when it comes to banning Russia altogether from SWIFT.
Some Russian banks are now cut out from SWIFT to pressure Russia to stop the war in Ukraine.
Now, I hope you understand what SWIFT is and how it impacts Russia and other counties.