When Russian banks were cut off from SWIFT in 2022, the goal was clear: deliver a fast financial shock. It didn’t quite work that way. Russia kept exporting, oil revenues surged and before long a different narrative began to take hold — that the sanctions had not worked after all.
That conclusion is easy to reach. But it misses what was actually happening. At the center of that story was Russia’s domestic financial messaging system, SPFS.
Built after the first round of sanctions in 2014, it was designed to reduce reliance on Western financial infrastructure and keep communication between banks running under pressure. After 2022, SPFS was often presented as evidence that Russia had 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 cutoff, and the economy did not collapse in the way many early forecasts suggested.
But that reading is too narrow — and the question now matters far beyond Russia, especially in Asia, where governments are increasingly thinking about financial sovereignty and sanctions risk.
Russia’s export performance in the short run was heavily supported by global oil prices. If export revenues are driven by favorable commodity conditions, they tell us very little about whether a country has actually replaced the financial system it lost.
That is the key point. A domestic workaround can keep parts of the system running. But that is very different from replacing a network like SWIFT.
The difference is not mainly technical. It is institutional. Global financial systems derive their strength from scale, trust, legal predictability and network reach. They function because banks, firms and governments across countries are already connected through them and rely on them every day.
A domestic platform may operate within national borders and with a limited set of partners. But it does not automatically recreate the wider ecosystem that gives a global network its real value.
That is where SPFS fell short. Russia was able to reduce part of its vulnerability. It was not able to recreate the international reach, liquidity access or institutional trust that come with being integrated into a global system. In that sense, SPFS worked as a buffer, not as an equivalent.
This distinction matters 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 prominent. China’s Cross-Border Interbank Payment System (CIPS) reflects the same logic on a larger scale: reduce dependence without fully 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.
That process, often described as financial fragmentation, is no longer abstract. It is tied to geopolitical rivalry, trade tensions and the growing possibility that payment systems evolve in ways that are less interconnected, making cross-border transactions more complex and less efficient.
Still, 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 created overnight. Nor can liquidity, legal certainty or international acceptance. These are built gradually, through repeated use and broad participation.
That is why claims about the rapid replacement of existing financial infrastructure should be treated with caution. Fragmentation may increase. More countries may experiment with alternatives. But fragmentation does not automatically produce systems with the same weight or flexibility as the ones they aim to replace.
Recent research supports this view, showing that financial resilience 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 soften the immediate impact of sanctions. It also shows that deeper forms of dependence are much harder to escape.
For Asia, that is the more important takeaway. The region may play a larger role in shaping the future of cross-border payments. But success will depend not only on building new systems, but on whether those systems can earn the trust and participation needed to function at a truly global scale.
That is a much harder task than simply building an alternative — and one few countries have yet achieved.
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 teaching 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, payment infrastructure, and the resilience of cross-border financial systems. He has served as a consultant to several international organizations and sits on 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, foreign debt, and inflation, with a focus on the Gulf region and other emerging economies.
