EU bans Russian banks from SWIFT as Moscow considers gold payments

The EU bans Russian banks from SWIFT as Moscow considers gold payments

The decision to exclude several Russian banks from the SWIFT messaging system, announced by European Commission President Ursula von der Leyen, has sparked confusion over who ultimately bears the cost. The paradox is textbook: Brussels blocks Russian entities from the international payment system while simultaneously needing to buy gas, oil, wheat, and fertilizers from Moscow. In practice, the EU blocks its own ability to pay for these commodities, while the rest of the world continues trading with Russia without issue. The result, according to circulating analyses, is an immediate increase in the cost of all imports.

What exactly does removing Russia from SWIFT miccionan

SWIFT is the network connecting banks worldwide to process international payments. Excluding an entity from this system is equivalent to cutting off its standard channel for receiving or sending money across borders. However, this measure is not a total blockade: it affects a selection of Russian banks, not any economic agent in the country. This is the fine print that many headlines ignore.

The problem is that excluding Russia from SWIFT does not prevent it from selling gas to China, India, or Iran. It only prevents Europe from paying normally. In other words, the EU excludes itself from the payment circuit while Moscow retains alternative buyers. Some summarize this bluntly: Russia’s only poor customers will be Europeans.

A figure circulating in the debate is that without Russian gas, there is no heating, electricity, or fertilizer for the fields. And without Russian wheat, food prices rise for European buyers, who face a more restricted market with less negotiating power. The consequence, according to this same view, is a cascading price hike on all imports.

The tug-of-war between the euro and commodities

The underlying discussion is what is worth more: money or what is bought with it. One school of thought holds that the euro, dollar, or any currency is just paper if there is no commodity behind it. Russia has wheat and gas. Europe has euros and Mercedes. The one who needs to eat and heat their home three times a day is in a weak position compared to the one selling what is eaten and what provides heat.

The counterargument is that European products, particularly machinery and automobiles, have global demand due to their quality. The European manufacturing standard is among the best in the world, argue those who believe the EU’s negotiating position is not so fragile. But a car is bought every ten years; heating and food are needed daily.

The detail that disconcerts many is that public debt in euros no longer serves to buy food or gas from Russia. The European Central Bank can issue debt, but that debt is not accepted as payment in Moscow. Money stops being money when the seller does not want it.

Can Russia demand payment in gold or Bitcoin?

If Moscow decides that its commodities are paid for in gold, Bitcoin, or any asset other than the dollar, the Western financial system faces a serious problem. This is the hypothesis causing the most anxiety: the dollar loses its role as the mandatory payment currency for energy trade.

The petrodollar, the mechanism by which crude oil is priced in dollars, is sustained by a combination of military and financial power. Missiles are the foundation upon which the rest of the arsenal, including the dollar itself, rests. Every country that has tried to exit the system has ended up badly. The question is whether Russia, with its nuclear arsenal, is in a position to force a change in rules.

The real cost for the European citizen

Beyond geopolitics, the impact is measured in the grocery basket and the electricity bill. The rise in energy costs drags down industry, transport, and food. The VAT increase on some products seems trivial compared to what is looming if gas and wheat prices spike suddenly.

The irony is that the measure is presented as a sanction against Russia, but the first victim may be the European consumer. The shot may backfire, even those supporting the hardline admit. The hovering question is how long Europe can afford to pay more for the same goods.

Germany’s response and NATO’s role

The episode has exposed Germany’s energy dependence and Berlin’s discomfort with the secondary role assigned by Washington. Pressure on the German chancellor to appear firmer is growing, and some are calling for a European army with a blue background and stars.

The discussion on spending more on defense, already raised by the previous US administration, is back in the spotlight. Europe needs to protect its interests within NATO, and that costs money. The problem is that the energy bill and the defense bill arrive at the same time.

What might happen with the dollar and world trade

No one has a crystal ball. What is known is that China is watching closely and that the rest of the world can continue trading with Russia without going through the European SWIFT. If Moscow and Beijing close alternative payment agreements, the dollar loses market share.

The most repeated hypothesis is that the system will fragment into two circuits: one Western and one alternative. In that scenario, Europe pays more for everything, and Russia sells to others. The winner, if there is one, is whoever sells what everyone needs.

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In the end, the disconcerting fact is simple: the EU has decided to prevent itself from paying for what it needs, while the rest of the world continues buying from the same seller. The price of that paradox is paid by the European citizen, who does not yet know how much the move will cost him.]