Financial safety

The SWIFT System: A Focus on the U.S.–Russia Financial Confrontation

The SWIFT system is an information exchange system among international financial institutions. The bank card payment function supported by the SWIFT system is the reflection of a country's financial security. In the Ukraine crisis in 2014, the United States and Europe imposed sanctions across multiple sectors, including financial sanctions against Russia. The goal of such an extreme measure was to cut off the Russian banks from the SWIFT system, thereby crashing the Russian bank card payment system and in turn disrupting domestic and foreign economic activities. Although this measure was not actualized in the end, its threat to the Russian financial system has become an urgent issue for the country to address. In order to counter U.S. and European sanctions and protect its financial security, Russia quickly established its own national card payment system as well as System for Transfer of Financial Messages (SPFS). In March 2019, political unrest broke out in Venezuela during which bank cards issued by Russia were frozen again. This article seeks to present a systematic analysis of the U.S.-Russia conflict surrounding the SWIFT system and its prospects.