Skip to main content

China and Russia are working on homegrown alternatives to the SWIFT payment system

by Siddhi Ashar, May 3
1 minute read

With the ongoing conflict between Ukraine and Russia, some Russian banks have been swiftly banned from SWIFT, the Belgium-based messaging service that banks around the world use to easily communicate about cross-border transactions. Hampering international transactions and their trade systems, Russia has begun to look for economic alternatives. Russia and China are both proposing a ruble-based (System for Transfer of Financial Messages (SPFS)) and yuan-based (China’s Cross-Border Interbank Payment System (CIPS)) financial system respectively.

assorted banknotes

So what?

While both systems come with flaws such as a limited user base or value conversions, they do pose a threat to the US dollar hegemony. US wages will continue to decline and inflationary pressures on consumers will continue to grow to make people poorer. Countries like India and Saudi Arabia have expressed interest in both SPFS and CIPS which could indicate the start of this economic transition. As the conflict grows, could this shift lead to the world being divided into economic blocs such as a dollar-based economy and a ruble or yuan-based economy? What would this mean for China’s global positioning and its economic ambitions?

Sources

Details

by Siddhi Ashar Spotted 26 signals

With a background in international studies and filmmaking, Siddhi works with the Futures Centre team to creatively push our current imaginaries and create more positive visions of futures rooted in equity. Her works centers around challenging common narratives and working agilely to bring forth more representative ones. Through her role at the Futures Centre, she focuses on the answering the question, how can better climate communication and visioning help stakeholders work together and act intently, empathetically and urgently?

Have you spotted a signal of change?

Register to receive the latest from the Futures Centre.
Sign up

  • 0
  • Share

Join discussion

Related signals

Our use of cookies

We use necessary cookies to make our site work. We'd also like to set optional analytics cookies to help us improve it. We won't set optional cookies unless you enable them. Using this tool will set a cookie on your device to remember your preferences.

For more detailed information about the cookies we use, see our Cookies page.

Necessary cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytics cookies

We'd like to set Google Analytics cookies to help us to improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our 'Cookies page'.

>