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European Union'S Financial Sanctions Against Russia – Implications For The International Payment System

Author

Listed:
  • Claudia Gabriela BAICU
  • Iulia Monica OEHLER-ȘINCAI

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.

Suggested Citation

  • Claudia Gabriela BAICU & Iulia Monica OEHLER-ȘINCAI, 2022. "European Union'S Financial Sanctions Against Russia – Implications For The International Payment System," Euroinfo, Institute for World Economy, Romanian Academy, vol. 6(3), pages 3-17, September.
    • Handle: RePEc:iem:eurinf:v:6:y:2022:i:3:p:3-17
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    File URL: http://www.iem.ro/rem/index.php/euroinfo/article/view/836/919
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    More about this item

    Keywords

    financial sanctions; Russo-Ukrainian war; SWIFT system; international payment system; European Union;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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