Sanctions on Russia May Be Streamlined, Sped up by the Digital Age

Russia’s attack on Ukraine is now unfolding.

More than 5,500 miles away, the United States is ratcheting up sanctions aimed at punishing Russia for its invasion. It remains to be seen whether the escalated sanctions will have the desired effect, pressuring Russia’s economy enough to blunt and bring an end to the military action.

In some sense, at least, the digital age may make it easier to impose those same sanctions, to pressure the country across all aspects of life — from financial services to retail commerce.

As of Thursday morning (Feb. 24), President Joe Biden is expected to announce a new round of sanctions that, along with additional measures imposed by allied nations, would effectively cut Russia off from key technologies and markets, while weighing heavily on the country’s banks.

The sanctions being announced Thursday come on top of efforts announced this week by Biden, more surgical in scope, that singled out a few banks and elite families in Russia.

Read more: US, Europe Levy Russia Sanctions, but All-out SWIFT Ban Not Likely Yet

At least some of the additional measures might include keeping Russia from accessing semiconductors or cutting the country off from the international global system known as SWIFT. In other actions that might target individual companies, Russian firms could be delisted from stock exchanges (the Russian equity markets are down more than 30% on Thursday). Targeting Russia’s financial system is key, since about half of its trade is conducted in dollars.

Turning Access ‘Off’

Those actions — banning access to some of the nuts and bolts of tech (the chips) or turning “off” access to the world’s financial system — speak volumes to how pervasive the digital age is, no matter where you look.

Incidentally there may be some collateral damage. Sites such as eBay sell into the country, and while it’s unlikely that U.S. firms would be specifically pressured to stop having a presence in the region altogether, there will be at least some chilling effect (slight though it may be) on eCommerce top lines.

We can get a sense of just how (relatively) easy it is to disrupt everyday life in the digital age. Ukraine’s central bank Thursday suspended the country’s currency markets, limited cash withdrawals and halted the use of electronic currency and digital wallets.

See more: Ukraine Caps Cash Withdrawals, Suspends Use of Digital Wallets