Cutting Russian banks from SWIFT will give bitcoin the chance to serve as an international currency. But it may be short-lived.

A few months ago, bitcoin got its first chance to become an international currency, as El Salvador adopted it as its currency, side by side with the mighty dollar. It was a bold move that created a great deal of hype and helped push the digital currency to new highs.

Unfortunately, El Salvador's experimentation with digital currency didn't go well for bitcoin bulls. Bitcoin lacks the usual properties of regular money. Thus, it failed to gain broad acceptance among Salvadorian people.

With the U.S. and its allies cutting Russian banks from SWIFT — the system that allows banks to execute transactions safely and efficiently — the digital currency gets another chance to serve as a regular currency. Thus, the big rally was seen in bitcoin and other cryptocurrencies in the last couple of days.

But the chance is limited, as using bitcoin and other cryptocurrencies to fill the void created by the absence of SWIFT won't be that easy.

"There are ways for Russian banks to get around being excluded from SWIFT [for example, crypto], but it is more costly and cumbersome," said Javier Díaz-Giménez, IESE Business School professor of economics.

Russian banks have ways to deal with the situation, like the use of an alternative system, the System for Transfer of Financial Messages, according to Brad Rustin, chair of Nelson Mullins' financial services regulatory practice at Nelson Mullins Riley & Scarborough.

"This is maintained by the Central Bank of Russia and was developed following the Crimean sanctions programs," said Rustin. "The system, much like the U.S.' FedWire system, has broad coverage domestically, although Russia has taken steps to integrate [it] with other nations, such as China, India and Iran. At the end of 2020, 23 foreign banks connected to [it] from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan and Switzerland. Today, this network handles about a fifth of the Russian transaction volume. Russia had been working to integrate [it] with China's Cross-Border Interbank Payment Systems."

Russian banks may use the banks of countries that do not take a clear position on the measures imposed on Russia, through triangular bank transactions, to overcome the problem for Russia. Relevant examples exist in the recent past. France, Italy, and Austria are the top three countries without standing loans to Russian guarantors, though the scale of this exposure in total appears low.

The bottom line is that cutting Russian banks from SWIFT may not be as dire as it sounds for Russia's financial system and may not be as bullish for bitcoin either. As a result, the digital currency's second chance to become a regular currency may be short-lived.