EUROPEAN UNION'S FINANCIAL SANCTIONS AGAINST RUSSIA – IMPLICATIONS FOR THE INTERNATIONAL PAYMENT SYSTEM

Claudia Gabriela Baicu and Iulia Monica Oehler-Șincai
Authors registered in the RePEc Author Service: Iulia Monica Oehler-Şincai

Euroinfo, 2022, vol. 6, issue 3, 3-17

Abstract: Financial measures hold an important place within the sanctions adopted by the European Union and its Western allies against the Russian Federation following the invasion of Ukraine. In this context, the present paper aims to investigate the alternatives available to the Russian Federation for bypassing sanctions related to exclusion from the SWIFT system and the possible implications for the international payment system. The results of the research undertaken in this paper highlight that financial sanctions could accelerate the development of alternative payment systems and the use of cryptocurrencies to perform international payments. However, despite their attractiveness, these alternatives may face several challenges and impediments, including in terms of international coverage. But in the long run, the hegemony of the American dollar in the international monetary system could be affected, and the internationalization of the Chinese yuan could increase. Amid the current geopolitical tensions, one of the risks facing the international payment system is its possible fragmentation.

Keywords: financial sanctions; Russo-Ukrainian war; SWIFT system; international payment system; European Union (search for similar items in EconPapers)
JEL-codes: E42 F51 G21 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:iem:eurinf:v:6:y:2022:i:3:p:3-17

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