As reported by 'Khvylia', Forbes writes about this.
The unprecedented sanctions imposed on Russia in 2022 were meant to paralyze the country's economy; however, the reality turned out to be more complex. Despite disconnecting the largest Russian banks from the international financial system, international trade continues to bring Moscow hundreds of billions of dollars.
Circumventing Traditional Channels
When Western countries blocked Russian banks' access to the global SWIFT system, Moscow quickly found alternative routes. Oil supplies were redirected to Asian countries with settlements in national currencies, bypassing the US dollar. 'Shadow fleets' of tankers allowed avoiding Western insurance and creating parallel supply chains.
A rapid adaptation occurred in the Russian market. Western brands disappeared from shopping malls, but their replacements appeared within months. Russian tech companies created analogs of food delivery apps, car-sharing, and e-commerce.
After Visa and Mastercard withdrew, Russian payment systems and state digital banks filled the created niche. Consumers almost seamlessly switched to cards and mobile wallets with new symbols, continuing their usual transactions.
Impact on the Fintech Industry
The situation with Russia has become indicative for the global fintech sector. In 2024, global regulatory fines reached a record $19.3 billion, and 90% of fintech companies report difficulties with compliance.
New Reality
In 2024, bilateral trade between China and Russia reached a record $234 billion, demonstrating the limitations of unilateral sanctions. The effectiveness of restrictions now depends on the ability to create broad international coalitions.
The sanctions imposed on Russia in 2022 did not lead to a complete blockade of the country's economy. Moscow found ways to circumvent the restrictions, which shows the need for broad international coalitions to successfully implement sanctions pressure.