The United States, Canada, and its European allies concurrently agreed on Saturday, 26th February, to the removal of key Russian banks from the interbank messaging system, SWIFT.
Moreover, the Western powers' decision will sever Russia from "much of the global financial system."
"This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally," a joint statement from the global powers read.
Moreover, the decision of excluding Russian banks from the SWIFT system aims to dent the country's efforts in pushing its war propaganda forward.
Russia's declaration of war against Ukraine was met with stern lambaste and strong condemnation from the rest of the world while the US, Canada, and the European allies made the loudest announcement of their distaste for the skirmish.
Moscow's exclusion from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) will hinder Russian banks' operations since they will no longer be able to communicate securely with banks beyond its borders.
A similar decision back in 2014 resulted in Iran's removal from the SWIFT system following its Tehran's nuclear program.
Apart from cutting Russia off from the worldwide banking telecommunication system, countries such as Italy, Germany, and France have also announced sanctions.
Meanwhile, the European allies have decided on freezing Russia's central bank reserves locked with them as a sign of stronger sanctions. Moreover, this decision will interrupt the Russian central bank's transactions with the rest of the world.
"This will show that Russia's supposed sanctions proofing of its economy is a myth. The USD600 billion-plus war chest of Russia's foreign reserves is only powerful if Putin can use it," a senior administration official of the US said on Saturday.
"You will immediately see a chilling effect fall over the Russian banking sector even beyond what's already occurred," the official stated, adding "We've now targeted all 10 of Russia's largest financial institutions, holding nearly 80 percent of the Russian banking sector's total assets."
Primarily, Russia's global oil and gas transactions with its affiliate or partner countries are carried through the SWIFT system. However, with the Western powers' decision coming into play, this will greatly affect Russia's purchasing ability of resources that will aid in the continuation of their war.
Meanwhile, SWIFT in a public statement said, "Any decision to impose sanctions on countries or individual entities rests solely with the competent government bodies and applicable legislators."
"Being incorporated under Belgian law, our obligation is to comply with related EU and Belgian regulation," SWIFT's statement further read.
The West's sanctioning measure was welcomed by Ukrainian Prime Minister Denys Shmyhal who tweeted, stating, "Appreciate your support and real help in this dark time. Ukrainian people will never forget this! Keep holding the line! We are on our land."
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