Wars Without Bombs: How Money Became a Weapon in the Russia–Ukraine Conflict

When Russia invaded Ukraine in 2022, early headlines focused on columns of tanks and waves of missile strikes. Yet within days, the most consequential battlefield was not fought on physical terrain but on the global financial system. Selected Russian banks were barred from SWIFT, more than $300 billion in Russian central-bank reserves abroad were immobilized, and maritime insurers began withdrawing coverage for Russian cargo under new sanctions frameworks. Nothing was physically stolen and no vaults were breached, yet a substantial portion of Russia’s economy froze almost overnight.

Contemporary warfare now operates in an additional dimension; the hidden architecture that moves money around the world. Understanding this domain does not require advanced financial expertise. It helps instead to imagine a global airport. There are flight boards (who is sending money to whom), secure tunnels (the systems money travels through), and support services (fuel, insurance, and maintenance). In global finance, these take the form of messaging networks, correspondent banking channels, and real-time settlement rails. Control those, and you can determine who moves, how fast they move, and who cannot move at all.

The Financial Airport System

At the most basic level, global banking begins with SWIFT, which functions as the international communication backbone for banks. It does not move money; it transmits standardized, authenticated messages instructing banks to debit and credit accounts. When Russian banks were ejected from SWIFT in March 2022, following a precedent set when Iranian banks were disconnected in 2012, they retained their assets. However, they lost the ability to exchange payment instructions reliably and quickly with foreign institutions. International payments did not cease, but they became slower, riskier, and more error-prone. In  modern supply chains, where shipments, commodity payments, and trade finance operate “just-in-time,” latency is not simply an inconvenience, it is strategic harm.

SWIFT only sends messages. To have dollars across borders, banks rely on correspondent accounts. A Canadian bank, for instance, keeps U.S. dollars in a U.S. bank, a nostro account on one balance sheet and a vostro on the other. When sanctions or compliance actions freeze that account, the funds remain legally owned but practically unreachable. If a Canadian entity must pay a U.S. supplier while its dollar balances are frozen, it must find alternative foreign exchange quickly and often at a premium. That urgency increases transaction costs and liquidity stress. To avoid entanglement, banks and companies often adopt “de-risking” strategies. This means reducing or severing ties with regions or industries under scrutiny. As seen after 2022, this dynamic can isolate entire sectors from dollar and euro services.

For urgent, high-value transactions, banks rely on Real-time Gross Settlement (RTGS) systems operated by central banks. This is Fedwire in the United States, T2/TARGET in the European Union, and Lynx in Canada. These systems move balances held at central banks, providing immediate, irrevocable settlement (finality). Once a transaction settles through RTGS, it cannot be recalled. When participants lose access to RTGS or face restrictions, critical payments (like liquidity transfers to clearinghouses or the settlement of securities obligations) must be rerouted or collateralized more heavily. Even without public failures, this friction is strategically significant: in the nineteenth century, armies sought to destroy railroads; today, states restrict access to settlement rails.

Financial Tools as Weapons

Sanctions Lists & Automated Freezing

Governments maintain real-time sanctions lists that banks must screen against, the most prominent being the U.S. Treasury’s OFAC Specially Designated Nationals (SDN) list. Once an entity is listed, any dollar-denominated assets subject to U.S. jurisdiction are frozen, and global banks refuse transactions to avoid secondary-sanctions risk. In 2022, designations expanded swiftly across banks, vessels, energy traders, and logistics providers, and compliance updates propagated through payment screening systems within days.

 Sovereign Reserve Immobilization

Countries store large foreign-currency reserves abroad as insurance against crises. Russia held about $630 billion before the invasion. Roughly $300 billion of those reserves (primarily located in the EU and managed at institutions such as Euroclear) were immobilized by Western authorities in the weeks after the invasion. The principal remains frozen, but the interest income generated on these assets is now being directed to support Ukraine under EU/G7 measures adopted in 2024–25, marking a significant evolution in the treatment of sovereign reserves during conflict. This approach breaks from decades of tradition where reserve assets held in trusted institutions were considered completely untouchable.

Technology Denial as Economic Warfare

Financial pressure works in tandem with control over strategic technology. Since February 2022, the U.S. Bureau of Industry and Security (BIS) and the EU have imposed sweeping restrictions limiting Russia’s access to critical goods and technologies, including semiconductors and manufacturing equipment, with licensing requirements covering all items on the Commerce Control List for Russia/Belarus and extensive EU dual-use controls. Dutch measures affecting ASML exports illustrate how control of lithography tools shapes the technological ceiling of adversaries.

Maritime Insurance & Trade Services

Global trade travels by sea, roughly 80% of world merchandise trade by volume. Without Western maritime insurance, safety certification, and access to dollar/euro payments, ships cannot dock or obtain port services. Under the G7 price cap on Russian crude, vessels transporting oil above the cap are denied these services; compliance is enforced through attestations, documentation and audit trails rather than naval patrols. Sanctioned or high-risk carriers lose insurance, ports deny entry, and banks refuse settlement. Russia responded by assembling a “shadow fleet” to move oil and commodities outside Western cover. Credible estimates range from 600+ vessels to around 1,400 ships, reflecting opaque ownership and non-Western insurance.

 Adaptation & Counter-Measures

States under pressure innovate. China is expanding CIPS, a cross-border RMB payment system designed to reduce reliance on SWIFT, while central banks from Asia to the Middle East are piloting cross-border CBDC corridors such as the BIS-sponsored Project mBridge (which reached MVP stage in 2024). Meanwhile, reserve managers, particularly in emerging markets have increased allocations to gold, with 2022 and 2023 marking the two largest years of net central-bank gold purchases on record. These adaptations are incremental, but they signal a structural shift: the geography of trust in global finance is becoming a strategic variable.

 Costs and Collateral Effects

Weaponized finance is powerful because it leverages systems every nation depends on. Yet this universality brings side effects. Banks may over-comply to avoid risk, isolating firms and countries unintentionally; the World Bank documents how de-risking reduces access to cross-border financial services in emerging markets. Trade fragmentation raises transaction costs, and parallel financial systems create liquidity silos.

What took months during Iran’s 2012 SWIFT disconnection took days in 2022: the EU’s March 2 legal acts were executed by SWIFT within ten days, cutting designated Russian banks on March 12. Sanctions lists now update in real time; export rules evolve to close loopholes; shipping routes adjust to evade oversight. Financial warfare is faster, more precise, and more institutionalized than at any point in history.

Conclusion

In the twentieth century, power was measured in tanks, oil reserves, and industrial output. In the twenty-first, messages and ledgers have joined that list. SWIFT messages, correspondent accounts, RTGS access, maritime insurance, and chip supply chains have become strategic levers. Control them, and you can constrain a rival state without firing a single missile. Modern conflict is not solely kinetic or economic, it is informational, institutional, and infrastructural. Understanding this financial domain is no longer optional. It is essential for anyone seeking to grasp how nations wage war and defend sovereignty in the decades ahead.