Alternatives to SWIFT

What’s SWIFT exactly?

Before getting into possible alternatives to SWIFT, let’s dive into what the Society for Worldwide Interbank Financial Telecommunication is.

Alternatives

International Banks

Many very big banks have branches in multiple countries. That means they don’t need SWIFT because they are sending money internally from e.g. the Citibank office in Russia to the Citibank office in the US over their own infrastructure.

SPFS

Russian equivalent of the SWIFT, called System for Transfer of Financial Messages. Basically was developed because the west already threatened Russia with the SWIFT ban a few years ago.

CIPS

Same idea, but the Cross-Border Interbank Payment System is from China. Seem to be mostly important for RMB transactions.

SFMS

India also developed a standard called the Structured Financial Messaging System.

Stablecoins / Cryptocurrencies

While SWIFT, SPFS, CIPS and SFMS are standards controlled by countries, Stablecoins are asset-backed Cryptocurrencies which are backed by e.g. fiat money like the USD. The big advantage here is that you can’t ban or sanction a decentralized system.

Summary

If the Russian population is creative, then there are tons of ways to sent money around the world and maybe this sanction will result into a promotion of alternative payment systems.

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Christoph Miksche

Christoph Miksche

Software Developer and Investor from Germany. Writing about Software, Tech and Investments.