The decision by the US and Europe to disconnect select Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and to freeze Russia’s foreign reserves might have significant, long-term effects on the international monetary system. While transformations in this system have historically been slow to materialise, the range and scope of the recently deployed sanctions will likely catalyse a global push to diversify from the US dollar-centric global financial system. Whether the US and European countries, as well as their allies, will strengthen or reduce financial sanctions against Russia in the future, the “weaponisation” of finance against a G20 country like Russia sets an historical precedent that will amplify concerns that one day any country could be disconnected from western-dominated financial infrastructure. In the latest G20 meeting of finance ministers, Chinese Minister of Finance Liu Kun strongly criticised the “politicisation” of the global economy, warning that such moves may undermine international economic cooperation.
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