>Russia has also been building an in-house system since 2014—the last time SWIFT cutoff was threatened—which may mean they are able to temper some of the impact a cutoff would have on its economy.
If they're building a replacement, doesn't that also mean we should use "cut off SWIFT" now, rather than later when it'll be ineffective?
> If they're building a replacement, doesn't that also mean we should use "cut off SWIFT" now, rather than later when it'll be ineffective?
The replacement is already functional.
In fact, Russia is not the only one having built a replacement to protect against the risk that SWIFT would be sanctioned: Europe has done it too with Instex: https://instex-europe.com/about-us/
SWIFT is a private company; those sanctions make it less competitive, and it is hard to play whack-a-mole with a worldwide market.
SWIFT, to be fair, is very convenient because of its standards and high connectivity. But if SWIFT was sanctioned today, banks can use literally any mechanism to route funds, from SPFS to email. What matters is the recursive existence of accounts held at banks that have accounts held at banks.
I might be wrong but both of them aren't an equivalent to Swift. Rupay seems to be a card network like Visa and UPI builts on top of IMPS which might be considered an alternative, however IMPS is limited to financial institutions of one country and one currency.
I'm way too far away from power on anything like this so I might be terribly wrong, but I imagine that cutting off SWIFT might convince other countries doing bad things to consider adhering to Russia's system, if they see the West willing to cut them off as well. You then get fragmentation and SWIFT losing some of its "soft power".
Russia already uses multiple alternative settlement systems with China, Iran, and few other buddies like Norko, and Belarus.
> You then get fragmentation and SWIFT losing some of its "soft power".
This already lost any power it had in 2014, because the threat of disconnection was wasted.
An honestly, EU lost its face now to talk "soft power." Every foreign head of state going to meet EU bureaucrats will now look at them, and think "can I rely on these people who threw out every treaty for a want of sleeping without a blanket?"
I'm not satisfied at all with Europe response so far, but i might be missing something here.
> can I rely on these people who threw out every treaty for a want of sleeping without a blanket?
Why isn't the US sending troops? Because the risk of escalation and nukes are unacceptable. In case you forgot, Europe also has nuclear powers and the risk of escalation is higher if the EU as an organization openly acts on more then soft power.
And as far as i know, only the US and the UK are ignoring a treaty to offer security to Ukraine.
Again, I'm not satisfied with the response so far, but what exactly are you suggesting so that EU bureaucrats don't lose their credibility?
> Because the risk of escalation and nukes are unacceptable.
He can lob a nuke right now, but he knows he will lose against the US.
He will retreat to avoid an even bigger defeat.
Thugs I fought in my teenage years, even when they brought a knife to the fight, when they are afraid of getting KOed, and humiliated in front of their peers, they wrap up, and leave.
They don't want to get beaten up, risk humiliation, and potentially committing murder at the same time.
Similarly, US can give Russian state 2 choices, a defeat with orderly surrender, or end like Yugoslavia, but 10 times worse.
It's still an effective sanction because the Russian alternative is a half baked approach. It can only handle a fraction of the daily required transactions, only 40% of Russian banks are signed up to use it and it can only process payments during office hours.
To be fair, it's not only heating. It's power plants and gas to keep many factories working. Think about ovens of all sorts and all industrial processes that need a lot of electricity. But yes, it's the n-th loss of face of EU. It's not much about EU bureaucrats but about EU head of states, prime ministers, etc. which ultimately decide what bureaucrats do. On the other side of the ocean, if the USA let Putin go too far they risk losing part of their empire [1] which is always bad for business.
SWIFT is kind of like Facebook. It has the benefit of “everyone” already using it. So even if you make your own Facebook it won’t have the same functionality as Facebook and it’s very unlikely everyone from Facebook will be motivated enough to make an account on your platform, too.
Another interpretation is that keeping them on SWIFT at least gives you some leverage, while forcing them out of it only accelerates other payment infrastructure, which essentially will play right into Russia's hands anyway.
SWIFT sanctions are kind of blunt given that we're now living in a world where any major power can write some software. And in this case both China and India offer alternatives.
That applies to a lot of known future sanctions. Eg clearly Germany would like to not need any gas pipeline, and Russia will aim to build more pipelines to China before German governments can say no more Russian gas. However, could excluding them from Swift at some point between 2014 and this week be justified?
If they're building a replacement, doesn't that also mean we should use "cut off SWIFT" now, rather than later when it'll be ineffective?