Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Russian Alternative to SWIFT Dollar System Growing; Could Expand to Other Countries

  by    0   0

The Russians have an alternative money transfer system up and running, and according to a report in RT, it has now surpassed SWIFT in popularity in that country. This is part of a broader effort by countries like Russia and China to limit their dependence on the US dollar and set up alternative financial channels outside of the global dollar system.

According to the Central Bank of Russia, 416 Russian companies and government organizations had joined the System for Transfer of Financial Messages (SPFS) as of September. They include the Russian Federal Treasury and large state corporations, including Gazprom Neft, Rosneft and others. Russian parliamentary committee on financial markets head Anatoly Aksakov told RT the country is now in talks with other countries to expand the payment system beyond Russian borders.

The number of users of our internal financial messages’ transfer system is now greater than that of those using SWIFT. We’re already holding talks with China, Iran and Turkey, along with several other countries, on linking our system with their systems.”

It appears the Russians could be developing a viable alternative to SWIFT.

SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. The system enables financial institutions to send and receive information about financial transactions in a secure, standardized environment. Since the dollar is the world reserve currency, SWIFT facilitates the international dollar system.

SWIFT give the US a great deal of leverage over other countries. The US has used the system as a stick before. In 2014 and 2015, it blocked several Russian banks from SWIFT as relations between the two countries deteriorated. Last fall, the US threatened to lock China out of the dollar system if it didn’t follow UN sanctions on North Korea.

The growth of the SPFS could lay the foundation for a more permanent alternative to SWIFT.

According to RT, the development of SPFS began in 2014 after the US blocked those Russian banks from SWIFT and threatened to disconnect the country altogether. The first transaction on the SPFS network involving a non-bank enterprise was completed in December 2017.

As Thomas Luongo noted in a recent article about SPFS published at LewRockwell.com, the development of an alternative to SWIFT should come as no surprise.

How much of this is boast and how much of it is reality remains to be seen, but the important point here is that the minute the US weaponized SWIFT for use in its foreign policy, something like this was bound to occur. China has its own internal system.  And other countries are building theirs as well.”

And it’s not just countries that have traditionally rocky relations with the US looking for alternatives. In September, the EU announced plans to develop a special payment channel to circumvent US economic sanctions and facilitate trade with Iran.

As Luongo put it, once the cost of staying in SWIFT grew higher than creating an alternative, the decision was a no-brainer.

SWIFT is a monopoly system, a monopoly born of convenience and inertia thanks to it being neutral to whims of international political spats.  Enter the late stage of imperial thinking in the US where our control over world affairs is waning first in the hearts and minds of various people around the world and then in policy and you have the beginning of the end of SWIFT as the only international financial transfer system.”

Countries like Russia and China have been taking other steps to minimize their exposure to the dollar – specifically buying gold. And they’re not alone. On net, central banks purchased 148.4 tons of the yellow metal in Q3. That was 22% higher year-on-year and the highest level of quarterly demand since Q4 2014. Russia, Turkey and Kazakhstan accounted for the lion’s share of purchase, but we even saw increases in gold reserves from two EU banks – Hungary and Poland.

Despite the fact the People’s Bank of China hasn’t reported an increase in its gold reserves, it’s almost certain the Chinese are adding to their hoard of the yellow metal. Meanwhile, China is selling off US debt. Russia has also dumped virtually all of its US Treasury holdings.

Jim Rogers has gone as far as to say the dollar is on the way out.

In the next few years, the American dollar is going to lose its position as the world’s reserve currency and the world’s medium of exchange.”

Whether things go that far remains to be seen, but it’s clear the world is not happy with the dollar being the only game in town and is moving aggressively to establish alternatives.

WhyBuyGoldNowBanner.070815.590

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

US Senator Allegedly Bribed With Gold

Last week, a federal grand jury indicted Democrat Senator Bob Menendez and his wife Nadine Arslanian Menendez on bribery charges. According to the indictment, the senator and his wife took bribes, including 13 gold bars, from three New Jersey businessmen with Egyptian ties.

READ MORE →

Japanese Go on Gold-Buying Spree as Price Inflation Runs Rampant

With price inflation running rampant in Japan, Japanese households are rushing to buy gold. The sudden surge in demand, along with the devaluation of the yen, has driven the price of gold to record highs in yen terms.

READ MORE →

Banks Borrowed Another $2.2 Billion from Bank Bailout Program in August

The Federal Reserve continues to bail out US banks as the financial crisis that kicked off last March continues to smolder behind the walls. Banks borrowed an additional $2.2 billion from the Federal Reserve’s bank bailout program in August. This was on top of the $3.7 billion they borrowed in July.

READ MORE →

The Ticking Time Bomb Gets Closer to Zero as the National Debt Quietly Blows Past $33 Trillion

Do you hear that? It’s a ticking time bomb. Last Friday, the national debt quietly blew above $33 trillion. As of September 15, the outstanding federal debt stood at a cool $33,044,858,730,468.04.

READ MORE →

US Government Runs Budget Surplus in August But It’s Not Really Good News

The federal government charted a surprising budget surplus in August. But don’t be fooled. The feds didn’t miraculously fix their deficit problem. The Biden administration continued to spend money at an unsustainable pace last month. The surplus was merely a function of the reversal of student loan forgiveness.

READ MORE →

Comments are closed.

Call Now