The Russian central bank after 2014 set up the System for Transfer of Financial Messages (SPFS) to counter SWIFT being cut off.
Over 400 Russian banks are members (about twice the number that are connected to SWIFT) as well a dozen or so other bank outside Russian including Chinese banks and others.
So it may be a bit inconvenient but the money will Go by SWIFT from European bank to XYZ SPFS member bank outside Russia to a SPFS member bank in Russia.
“Since 2019 many agreements have also been reached to link SPFS to other countries payment systems in China, India, Iran, as well as the countries within the Eurasian Economic Union (EAEU) which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan. The EAEU also has Free Trade Agreements with Serbia, Singapore and Vietnam with multiple other deals pending. At the end of 2020, 23 foreign banks connected to the SPFS from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan, and Switzerland
…The stakes in disconnecting Russia are high. It would usher into place a new Cold War with mutually disconnected systems. EU trade and energy from Russia would need to be replaced by the United States instead, meaning EU consumer prices would significantly increase. SWIFT would be seen as untrustworthy by emerging nations and would cease to be global.”
Option C Dmitry Medvedev is arguing for nationalization of the banks.
China also launched its own version of payments systems called Cross-Border Interbank Payment System (CIPS). On top of this they started testing their digital Yuan during the Winter Olympics. Russia and China might know something others do not know about how well that went.
China’s AliPay, a subsidiary of Alibaba, has teamed up with Russian internet giant VK (formerly known as Mail.ru) to offer digital payment services to Russian users. I have seen this on VK as I myself am also banned from most American payment processors. However it is currently only available for Russian users.
The saying is necessity is the mother of invention. Well nothing has kicked the need for alternative payment systems and international currency transactions, harder than the US, EU, Kanada (yes I spell it with a K now)banning Russia from SWIFT. The signal to everyone else after Iran and Russia have been banned is do what we say or you are next. Monopolies are never good for anyone.
I will be on with Reed Coverdale Sunday 8pm EST to discuss all of this.
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Ukraine War ,Media, Military, Economics Explained