SWIFT bitcoin banks Russia Ukraine

Last week, Russia shocked the world when it launched a series of attacks on Ukraine. However, several nations and organizations reacted swiftly to the war with a series of sanctions on Russia for what they considered an unprovoked attack.

Russia, a growing Bitcoin community, finds itself on the receiving end of global criticism and bans. The majority of the sanctions placed on Russia have been economic. Therefore, in this article, you will discover how bitcoin is being adopted by affected people from this war.

Russia Out From the SWIFT System

One of the heavy moves made by economic leaders countries worldwide is by expelling Russia from SWIFT (Society for Worldwide Interbank Financial Telecommunication). In other words, SWIFT is a global organization that acts as an intermediary for financial institutions between nations.

Prior to this sanction, Iran is the only country cut off from SWIFT. This led to a loss of a third of its foreign trade. The decision, made by the US and NATO nations, is expected to isolate Russia from the global financial community.

Moreover, this sanction is the harshest of all the measures placed on Moscow. According to the United States, Russia would have to rely on phone calls or fax machines to make payments. However, there are repercussions to this move.

Russia is Likely to Start Using Cryptos

Cutting Russia out of SWIFT adds to the many reasons why other countries need to leave the dollar system. Most of these countries realize the limitations of going against the US or its allies. Therefore, the elimination from SWIFT, Russia will be encouraged to trade commodities in exchange for gold or the digital.

As world trade explores other choices for payment, the collapse of the US economy would follow in the footsteps of the sinking dollar.

Furthermore, the world would see an increased relationship between Russia and China following this latest sanction. China is one of Russia’s closest allies, and their union is a source of concern to the US and the west. Also, NATO and the UN see the China-Russia tie as a security threat. However, both countries would undoubtedly unite more than ever to oust the dollar and create a new system.

Moreover, another consequence from this sanction would be increased inflation. According to Statista,  the euro recently plunged to its lowest since 2020. In addition to inflation concerns, Europe and the world will suffer from energy constraints because Russia supplies 70% of gas from most European countries.

As a result, these countries would need to find another source of supply or face the harshest form of scarcity. Some parts of Europe are said to witness growing queues at gas stations. Such scenes could be the norm if Russia decides to hoard its products.

Russia’s De-Dollarization Plans

Since the sanctions that followed the Crimea annexation in 2014, Russia has sought several means to challenge the US dollar. The European country is mostly reliant on the dollar for its transactions. Furthermore, Russian President Vladimir Putin once accused the United States of weaponizing the dollar. However, cutting Russia out of SWIFT could have effects on the dollar.

Therefore, the enormous power wielded by the White House in the global economy is a source of concern to many countries.  In addition, countries like China and Russia are searching for a new payment method that would challenge the dollar and free the world from the monopoly of the dollar. China and Russia see the dollar’s strength as a security concern.

Russia’s desire to leave the dollar’s grip is a public affair. Russia’s de-dollarization attempt began before its Ukraine invasion. Last year, the European country liquidated its US treasury holdings from its $583 billion of central bank reserves.

Could Bitcoin be the Way Out?

China and Russia’s plans to stop the dollar’s reign could see them embrace another popular form of payment, Bitcoin. The digital currency is currently a bailout for the failing economies of the west. However, it could attain a greater position following this ban. Following the ban, Russia is now desperate for a solution, and Bitcoin appears to be their strongest alternative.

Moreover, Russia has a thriving Bitcoin community, being home to about 12% of the worldwide Bitcoin market capitalization. If Russia delves into Bitcoin as an alternative, this could act as a hedge against the consequences of the sanctions. This war could prove how desperate the world needs Bitcoin and the crypto community.

Following the renewed interest, Bitcoin prices could explode as more people adopt it. If things go as planned, the crypto community could be among the winners of the war.

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