How Russia Reshaped Its Financial System After SWIFT Sanctions
Since many Russian banks were disconnected from the SWIFT system, Russia has entered a phase of restructuring its financial architecture in an effort to reduce reliance on Western mechanisms and strengthen its monetary sovereignty. After several years of this shift, it is clear that Russia has made significant progress toward achieving a degree of monetary independence — though not without limits and challenges.
Significant Progress Toward Broader Monetary Autonomy
1. Developing an Alternative Financial Messaging System
Russia created the SPFS system as a domestic alternative to SWIFT, expanding it to include hundreds of financial institutions both inside and outside the country. Although SPFS does not possess SWIFT’s global reach, it has become an effective channel ensuring that Russian financial transactions continue despite Western restrictions.
2. A Major Surge in Ruble-Based Settlements
Recent years have witnessed a profound transformation in Russia’s payment patterns. Settlements in rubles now account for more than half of the country’s foreign trade, both in imports and exports. The use of the ruble has grown significantly across various regions—including Asia and Africa—reflecting the currency’s expanding footprint beyond Russia’s borders.
3. Greater Reliance on “Friendly” Currencies
Currencies such as the Chinese yuan, the Indian rupee, and the UAE dirham have become key alternatives for Russian transactions. This shift has helped Russia build a new financial network rooted in economic partnerships rather than Western institutions.
4. Strict Monetary Policies
Moscow has implemented strong capital controls and launched new financial initiatives, including the introduction of the digital ruble, aimed at stabilizing the financial system and enhancing oversight over money flows.
Limits and Challenges to Full Independence
Despite this progress, several obstacles still prevent Russia from attaining complete monetary independence:
Limited international adoption of the SPFS system compared to SWIFT.
Geopolitical uncertainty, which could affect relations with partner countries.Increased reliance on barter and non-traditional settlement methods, which remain temporary rather than sustainable long-term mechanisms.
Continued impact of Western sanctions on various sectors of the Russian economy.
Volatility of the ruble, influenced by political and economic pressures.
Conclusion
Russia has made substantial strides toward partial monetary independence by building an alternative financial system and expanding the use of its national currency in foreign trade. Nonetheless, this independence remains incomplete and constrained by several internal and external factors. Even so, Russia’s current trajectory suggests a continued reduction in reliance on the Western financial system — a shift likely to deepen in the coming years.
source:interfax
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