The United States, European allies and Canada agreed Saturday to remove key Russian banks from the interbank messaging system, SWIFT, an extraordinary step that will sever the country from much of the global financial system.
The global powers wrote in a joint statement that this will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.
Russian banks can't communicate securely with banks outside of its borders because of Moscow's exclusion from the Society for Worldwide Interbank Financial Telecommunication. Iran was removed from the international money transfer network in the wake of Tehran's nuclear program.
The internal messaging system between more than 11,000 banks and financial institutions in over 200 countries and territories is provided by the independent enterprise, SWIFT.
CNBC requested comment from SWIFT, but they did not respond immediately.
The United States, European Union and Canada have announced that they will impose restrictions on the use of international reserves by the Russian Central Bank in ways that may undermine sanctions.
The sanctions against Russia were imposed in response to the assault on Ukraine.
The United States, the United Kingdom, and the European Union imposed sanctions against Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov.
The threat of severe sanctions was meant to be a deterrent to Putin, according to the Biden administration.
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