Financial sanctions and the future of the international monetary system

The use of sanctions in response to the Russian invasion of Ukraine has been accompanied by the freezing of the Russia central bank reserves and the ban on the access to the SWIFT network for some Russian entities. European countries and other G7 members are now considering also to use Russia’s frozen assets or the revenues they generate in order to support Ukraine.

Independently of moral and political justifications put forth by some involved actors, these measures may affect the future of the U.S. dollar and the euro as reserve currencies. Is there a risk of fragmentation of the international monetary system? If this risk does materialize, what would be its implications? Are there ways to mitigate any adverse consequences and envision an orderly transition to a multipolar system?