SWIFT System Turns Into Economic Sanctions Instrument

The Western-dominated Society for Worldwide Interbank Financial Telecommunications (SWIFT) is considered the cornerstone of global financial transactions. It was founded in 1973 as a diplomatic alternative to the intense rivalry between New York and London. SWIFT is designed to make international payments quickly and efficiently. However, past examples show that SWIFT can also be used as a weapon, even though it is nominally independent. Alternative global financial transaction systems have been founded due to this possibility of SWIFT being used a weapon. Russia’s System for Transfer of Financial Messages (SPFS) managed one-fifth of all Russia’s financial communications by the end of 2020. China’s Cross-border Interbank Payment System (CIPS) is tiny compared to SWIFT, but already has users in over a hundred countries. CIPS will likely expand its reach and will be seen as an alternative to US and EU-driven Western banking systems. The EU, on 2 March 2022, announced that the Union "agreed to exclude key Russian banks from the SWIFT system". Given that there are already small yet viable alternative global financial transaction systems to SWIFT, it would be prudent not to exclude the possibility that this sanction will cause tectonic shifts on the global financial system.