Russia Ruble Could Turn Worthless After SWIFT Move: Report

The Russia ruble could turn worthless soon after the EU and the USA decided to kick Russia out of the SWIFT system as we reported in our latest cryptocurrency news.

After the US, EU, Canada agreed to remove the selected Russian banks from the SWIFT messaging system and the Central Bank is targeted next which can make the ruble close to worthless. In a joint statemetn on Saturday, the allies said they are committed to ensuring that the Russian banks are disconnected from the international financial system and can harm their ability to operate globally. But what comes as an unexpected and painful move is that the allies said they commit to imposing restrictive measures which can prevent the Russian Central Bank from deploying the international reserves in ways that undermine the impact of the sanctions.

Ukrainian crypto community is ready to provide a generous reward for any information about crypto-wallets of Russian and Belarusian politicians and their surroundings. War crimes must be pursued and punished! To share info please contact in Telegram: https://t.co/XHidwUQ8bE.

— Mykhailo Fedorov (@FedorovMykhailo) February 26, 2022

According to Rob Person who is an Associated Professor of International Relations at the US Military Academy which can mean that the central bank will not be able to access most of the reserves for currency interventions or exchange dollars and EUR for the Russia rubles. Person said:

“Rubles could (in theory) become close to worthless, with ordinary citizens conducting exchange in dollars. That would have to be on the black market since it’s technically illegal to pay for things with dollars/euros directly. Dollars will be scarce & precious on the street.”

Russia has about $650B in reserves while the central bank had 16.4% of the holdings in dollars and 32% in EUR and the end of 2021 while the Deputy Chief Economist for the Institute of International Finance will say that sanctioning Russia’s Central bank is likely to have a huge effect n the Russian economy and the banking system:

“This would likely lead to massive bank runs and dollarization, with a sharp selloff, drain on reserves — and, possibly, a full-on collapse of Russia’s financial system.”

In the meantime, the traders are preparing for a disaster on the Russian currency market according to Central Bank Deputy Chairman Sergei Aleksashenko:

“I think they will stop trading and then the exchange rate will be fixed at an artificial level just like in Soviet times.”

Mohamed El-Erian who is a part-time Chief Economic Adviser at Allianz also said:

“Inevitably there would be spillovers and spillbacks, including more of a stagflationary impetus to the global economy and greater likelihood of Russian arrears to Western companies and creditors.”

But many Russians will probably continue to get paid in rubles, which won't be worth much for basic necessities. Remember those pictures from Weimar Germany of folks with carts full of worthless cash? It wouldn't look like that today, but the effect could be the same. 13/ pic.twitter.com/hXnKkrFpp4

— Rob Person (@RTPerson3) February 27, 2022

In the meantime, the Ukrainian Vice Prime Minister and Minister of Digital Transformation Mykhailo Fedorov said that the Ukrainian crypto community will provide a reward for any information about crypto-wallets of Russian politicians and their surroundings.