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SWIFT is remote past
Possible ways of restructuring the international financial system and its release from the centralized control of pro-American global institutions were discussed today by participants at the roundtable “Development of the System of International Settlements in the Context of Economic Transformation” chaired by the director of the Institute of Economics of the Russian Academy of Sciences, Mikhail Golovnin .
Economists traditionally think that modern globalized financial system originates from the Bretton Woods agreements of 1944, by which the participating countries abandoned the use of the gold standard in favor of the US dollar. The Soviet Union did not accede to the ratification of the agreement, and in 1949 established a separate Council for Mutual Economic Assistance (CMEA), which during the Cold War period provided international financial settlements between the countries of the socialist camp.
With the collapse of the Soviet Union, the CMEA ceased to exist. Post-Soviet Russia had no other real alternatives than joining the international system of division of labor, and at first received certain advantages from this. However, over time, the advantages have been minimized, and the costs have increased compared to Western countries.
Chairman of the Commission on Payment Systems and Cross-Border Settlements of the Russian Chamber of Commerce and Industry, Andrei Mikhailishin, believes that Russia is not alone in its desire to reconsider the global economic status quo. This is evidenced by the expansion of the list of BRICS member countries. The economist views the entry of new members into the association as a form of counteracting the dominance and centralized control of pro-American global financial institutions over the economies of national states. From January 1, 2024, Argentina, Iran, Ethiopia, Egypt, Saudi Arabia, and the UAE will become full members of BRICS.
“Some existing global institutions are simply ineffective,” says Dmitry Kochergin, professor at the Department of Credit Theory and Financial Management at St. Petersburg State University. “Bitcoin financial transactions are completed within an hour, some specialized cryptocurrencies do it even faster. For comparison, the waiting time for a transfer through SWIFT can be up to several days. It’s not even a thing of the past, but the thing of remote past.”
It will not be possible to completely separate from the global financial community, experts think. However, it is possible to implement technical solutions that will reduce costs. This could be the creation of artificial units of account, national and supranational digital currencies, updating of the technological platforms where cross-border financial transfers run.
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