- China’s SWIFT Alternative and the (Engineered) Death of the Dollar
by James Corbett, TheInternationalForecaster.com, March 11, 2015
Forget all the nonsense and hoopla about the Apple Watch or the GM stock buy-back. Far and away the most important economic story of the week is one you won’t find on the front page of Bloomberg or MarketWatch. New reports indicate that China is ready to launch its SWIFT alternative, and for those who have their ear to the ground this is the most significant move yet in the unfolding process of de-dollarization that is seeing the BRICS-led “resistance bloc” breaking away from the financial stranglehold of the US-led “Washington Consensus.”
For those who don’t know, SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication and is shorthand for the SWIFTNet Network that is used by over 10,500 financial institutions in 215 countries and territories to transmit financial transaction data around the world. SWIFT does not do any of the clearing or processing for these transactions itself, but instead sends the payment orders that are then settled by correspondent banks of the member institutions. Still, given the system’s near universality in the financial system, it means that virtually every international transaction between banking institutions goes through the SWIFT network.
This is why de-listing from the SWIFT network remains one of the primary financial weapons wielded by the US and its allies in their increasingly important financial warfare campaigns. In 2012, SWIFT agreed to de-list 30 Iranian financial institutions (including the central bank) from their network as part of the US/EU-led sanctions on Tehran, a move that was meant to stop billions of dollars’ worth of oil and export sales from being repatriated into the country and bring Iranian business to a standstill. Throughout the recent tensions between the US bloc and Russia over the civil war in Ukraine, the idea that SWIFT could similarly de-list Russian banks has been repeatedly floated as a potential next step for the US and its allies.