When the Russian banks were discontinued SWIFT in 2022, the goal was clear: to deliver a quick financial hit. It didn’t quite work out that way. Russia continued to export, oil revenues soared, and a different narrative soon began – that the sanctions hadn’t worked after all.
This conclusion is easy to reach. But it misses what was really going on. At the center of that story was Russia’s internal financial messaging system, SPFS.
Built after the first round of sanctions in 2014, it was created to reduce dependence on Western financial infrastructure and keep communication between banks under pressure. After 2022, the SPFS was often presented as evidence that Russia was prepared for financial isolation and could manage without SWIFT.
At first glance, the argument seemed convincing. Russia’s exports remained strong in the months after the shutdown, and the economy did not collapse in the way many early forecasts suggested.
But this reading is too narrow — and the issue now matters beyond Russia, especially in Asia, where governments are increasingly thinking about financial sovereignty and the risk of sanctions.
Russia’s export performance in the short term was heavily supported by global oil prices. If export earnings are driven by favorable commodity terms, they tell us very little about whether a country has actually replaced the financial system it lost.
This is the key point. An internal solution can keep parts of the system running. But this is very different from replacing a network like SWIFT.
The difference is not primarily technical. It is institutional. Global financial systems they derive their power from scale, trust, legal predictability and network reach. They work because banks, firms and governments across countries are already connected through them and rely on them every day.
A domestic platform can operate within national borders and with a limited set of partners. But it does not automatically recreate the broader ecosystem that gives a global network its real value.
This is where SPFS failed. Russia was able to reduce some of its vulnerability. It was unable to recreate the international reach, access to liquidity or institutional trust that comes with integration into a global system. In this sense, the SPFS functioned as a buffer, not an equivalent.
This distinction has implications for how Asia thinks about the future of financial infrastructure.
Across the region, concerns about sanctions exposure, financial sovereignty and dependence on external systems are becoming more pronounced. of China Cross-Border Interbank Payment System (CIPS) reflects the same logic on a larger scale: reduce dependency without completely replacing the existing system.
More broadly, Asia is becoming central to a deeper question – whether global finance will remain integrated or gradually split into parallel systems.
This process, often described as financial fragmentationit is no longer abstract. It is linked to geopolitical rivalry, trade tensions and the growing possibility that payment systems will evolve in ways that are less interconnected, making cross-border transactions more complex and less efficient.
However, the Russian case offers a clear warning. Building an alternative is much easier than building an equivalent.
In cross-border finance, the value of a network depends on who else is willing to use it. Trust cannot be built overnight. Nor can liquidity, legal certainty or international acceptance. These are built up gradually, through repeated use and extensive participation.
This is why claims to quickly replace the existing financial infrastructure should be treated with caution. Fragmentation may increase. More countries may experiment with alternatives. But fragmentation does not automatically produce systems of the same weight or flexibility as those they aim to replace.
The last one explorative supports this view, showing that financial sustainability depends less on short-term trade outcomes and more on deeper forms of financial integration and system capacity.
Russia’s experience makes this clear. It shows that a country can prepare, adapt and mitigate the immediate impact of sanctions. It also shows that deeper forms of addiction are much more difficult to escape.
For Asia, this is most important. The region can play a greater role in shaping its future cross-border payments. But success will depend not only on building new systems, but also on whether those systems can gain the trust and participation needed to operate on a truly global scale.
This is a much more difficult task than simply building an alternative – and few countries have yet succeeded.
This article is based on a peer-reviewed study published in International Economics and Economic Policy (https://doi.org/10.1007/s10368-026-00732-9).
Mesbah Sharaf is a full professor at the University of Alberta whose work focuses on international economics, global finance, and the economic effects of geopolitical shocks. His research examines sanctions, payments infrastructure and the resilience of cross-border financial systems. He has served as a consultant in several international organizations and is a member of the editorial boards of several academic journals. Dr. Sharaf holds a PhD in economics from Concordia University, Canada.
Abdelhalem Shahen is an associate professor of economics at Imam Mohammad Ibn Saud Islamic University (IMSIU) in Saudi Arabia. His research examines digital finance and fintech, financial inclusion and economic development, as well as macroeconomic topics such as exchange rates, external debt and inflation, with a focus on the Gulf region and other developing economies.
