AUSTIN, Texas — As the U.S. and European nations look at retaliating against Russia over its invasion of Ukraine, one sanction under consideration could literally isolate that country from international banking.
Every day, millions of bits of information flow between banks in more than 200 countries around the world using the SWIFT financial system that keeps track of money that flows from one nation to another. SWIFT is an acronym for the Society for Worldwide Interbank Financial Telecommunication.
It works like this: If you send money from your bank in Texas to a person in another country, SWIFT is the system that lets the foreign bank know about it and make the payment.
Plus, SWIFT allows countries to pay for their imports and get paid for their exports.
If Russia were blocked from SWIFT, it could no longer make or accept payments for any of its goods and services outside of its borders.
Such a move would be so drastic it’s been called the "nuclear option."
So far, U.S. President Joe Biden and leaders of nearly all European nations aren’t ready to kick Russia out of SWIFT yet. But if it’s ever used, experts say that blocking Russia from the SWIFT banking system could strike a severe economic blow to that country.
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