Unnamed sources said to be in the know about President-elect Joe Biden’s plans have told Reuters that his team is considering financial sanctions, cyberattacks on infrastructure, and possibly even shutting Russia off from SWIFT "in response" to a massive, months-long hack attack on US federal government agencies, Fortune 500 companies, and a host of other entities which Biden has blamed on Moscow. However, the US has yet to present any evidence proving Russia's culpability.
Disconnecting Russia from the payments system would create temporary problems for Moscow, both in international settlements and foreign exchange markets, but would also hit a US economy struggling to pull dig out of the worst economic crisis since the Great Depression, Artyom Tuzov, director of capital markets at Univer Capital, a Moscow-based investment firm, says.
“First of all, it’s important to note that the US only has a hypothetical influence on SWIFT, which is headquartered in Belgium,” Tuzov explains. “Secondly, Russia can impose rather severe sanctions against American banks and politicians, something that’s disadvantageous for a country recovering after a crisis.”
What’s more, Tuzov says, if Russia moves forward with its recently announced plans to launch a digital rouble, the need to rely on an international payments system could disappear altogether, since entities doing business with their Russian counterparts will no longer need to rely on it.
In October, Bank of Russia Governor Elvira Nabiullina announced that the bank was collecting feedback on a prospective digital rouble, with a pilot project being considered for launch toward the end of 2021.
Tuzov admits that in the short term, Russia’s sudden unplugging from SWIFT may provoke panic-induced currency fluctuations, including a drop in the rouble’s value vis-à-vis other currencies. With time, however, he expects the rouble-dollar exchange rate to return to normal, and for more trade to be done in euros or Chinese yuan instead of the greenback.
Possible SWIFT restrictions aside, the US has a number of other options to “punish” Russia for the hack attack it has yet to show was committed by Moscow. The Obama and Trump administrations have already sanctioned dozens of Russian officials, companies, and private individuals, closed consulates, expelled diplomats, and threatened to impose secondary sanctions against companies and countries doing business with Moscow. The restrictions have been introduced over a range of pretexts, from the Ukraine crisis to election meddling. Earlier this year, acting secretary of Homeland Security Chad Wolf boasted that the White House had actually “run out of” Russian individuals to sanction.