Prime Minister Boris Johnson said on Tuesday he is in discussions with the US about banning Russia from the SWIFT global payments system as a possible measure. SWIFT is a global electronic payment-messaging system.
Disconnecting Russian banks from the system would be an unprecedented move against one of the world’s major economies.
When asked if Britain would really pull the trigger on this, Mr Johnson replied: "There is no doubt that that would be a very potent weapon.
"I'm afraid it can only really be deployed with the assistance of the United States though. We are in discussions about that."
Elina Ribakova, an economist for International Finance, said Russia would face major economic disruption if it was removed from SWIFT.
But the Kremlin has threatened to hit back by cutting Europe’s gas.
Russia supplies around 40 percent of Europe’s natural gas.
And it has already shown what it can do, having slashed supplies in recent months in a move that saw prices surge to record highs.
In fact, for over 30 days running, Russia has been diverting gas away from the East through the Yamal-Europe pipeline.
This saw December prices skyrocket to new records, even surpassing the October record that came as a result of Russia’s previous gas squeeze.
Shortages and rising prices have left the bloc scrambling to resolve an emerging energy crisis, but if the Russia was to further reduce supplies it could plunge the EU into chaos.
So far, its state-owned gas giant, Gazprom, has argued that it has been honouring its long-term contracts and has denied a deliberate gas squeeze.
But the new threat signals a chilling change in tone.
Nikolay Zhuravlev, Vice Speaker of Russia’s Federation Council, said on Tuesday: "SWIFT is a settlement system, it is a service.
“Therefore, if Russia is disconnected from SWIFT, then we will not receive [foreign] currency, but buyers, European countries in the first place, will not receive our goods - oil, gas, metals and other important components of their imports.
“Do they need it? I am not sure."
But he added that SWIFT is not the only system through which Russia transfers its money.
He also said that the joint decision of the UK and the US may not be enough to disconnect Russia from SWIFT.
This is because it requires a single decision of all countries that participate in the system.
Mr Zhuravlev said: "SWIFT is a European company, an association which involves a lot of countries.
But the US had already been preparing for the eventuality that Russia may cut gas if conflict breaks out with Ukraine.
That is because Ukraine is a key transit route for Russia’s gas to reach the EU.
Now, Mr Biden’s administration has called for an increased production of liquefied natural gas (LNG) around the world.
It would mean Europe could fall back on increased supplies coming from companies in the Middle East, North Africa and Asia, should Russia cut off the gas.
Amos Hochstein, Senior Adviser for Energy Security, has reportedly been drafting up a global strategy for contingency options to boost Europe’s supplies.
"A senior official has said his discussions are at a “fairly advanced" stage.
A senior administration official said earlier this month: "We are well aware of the potential impact of a reduction of Russian energy supply, both in Europe's market and globally, and we are working very hard to identify and manage those risks with a range of contingency options.”