Experts |
Russia Might Partially Bypass Swift With Cryptocurrencies
A bitcoin coin is on a table. Experts say Russia could partially bypass the Swift system with cryptocurrencies and with it a part of the sanctions. Photo: Ina Fassbender/dpa
© dpa-infocom GmbH
Kicking Russia out of the Swift system is considered technically complex – and may also have an enormous impact on Europe. Experts now fear that Russia could cope differently.
According to experts, Russia’s exclusion from the international banking communications network Swift need not lead to complete financial isolation in the medium to long term.
Russia would have at least theoretically two Swift alternatives in the field of digital currencies, said Philipp Sandner, economist at the Frankfurt School of Finance & Management, the German Press Agency. On the one hand, Russia could switch to classic cryptocurrencies. On the other hand, President Vladimir Putin could try to dock his country to the new Chinese digital currency e-Yuan (eCNY).
“In the short term, the alternative options in the direction of crypto assets such as Bitcoin and Ethereum as well as e-Yuan are still more of a theoretical nature,” said Sandner, who is considered one of the leading experts on digital currencies in Germany. In the medium term, however, this could look very different. “A lot can be achieved in a period of six to twelve months. But you won’t be able to do that in a few days.”
e-Yuan is the digital currency in China
Sandner sees higher hurdles in switching to the Chinese digital currency, which was introduced for the Winter Olympics in China: “So far, the digital e-Yuan has only been about domestic payment transactions. So far, the focus has not been on connecting people and companies from abroad.”
It has been possible to shift values via cryptocurrency platforms for years, Sandner said. This applies not only to Bitcoin or Ethereum, but also to so-called stablecoins that are firmly tied to the US dollar, such as Tether (USDT), USD Coin from Circle or PAX. «The transfer of large sums also works. So far, however, it has mainly been individuals who have been involved, mainly young people who are tech-savvy. But they only make up around five percent of the population.” As a rule, companies have no experience with Bitcoin & Co., but are firmly anchored in the Swift system.
Sanctions could be circumvented with crypto
Ross S. Delston, an anti-money laundering compliance expert, believes that Russia has been preparing for the financial sanctions for some time. “If the Russians decide – and I’m sure they already do – not to use any currency other than cryptocurrencies, they can bypass almost all sanctions,” he told CNN. However, it is not so easy to circumvent sanctions by shifting your entire dollar assets into Bitcoin. “It’s hard to buy anything with cryptocurrencies, especially big things.”
Sandner called on European politicians to deal more intensively with the topic of blockchain. “At the political level in Europe, there is too little understanding of what is happening in this area, whether we are talking about Bitcoin or the e-Yuan. And that’s dangerous because you can’t deal with it properly.”