BRICS Alternative to SWIFT Payment System

Before we start analyzing specific systems like SWIFT and the newly announced BRICS replacement, we will briefly explain what SWIFT is and how it works.

SWIFT or Society for Worldwide Interbank Financial Telecommunication is a cooperative established who started 1973 in Belgium. SWIFT provides banks and financial institution opportunities to send messages true international network. This international network serves for fast payments and money transfer.
This network allows businesses to send and receive electronic payment worldwide. More than 40 million messages are send daily using SWIFT services with information such as money transfer instruction.
Each financial organization has a unique code from 8 – 11 characters, also known as bank identification code or BIC. BIC also uses a term as SWIFT code. Lest see how the code is assigned and used by the messaging system. For example, we have a code like this BCITITMMXXX

  1. First 4 characters: Bank code (BCIT for Intesa Sanpaolo SPA)
  2. Second 2 character: Country code (IT for Italy)
  3. Third 2 character: Location of the bank headquarter in this case (MM for Milan)
  4. Last three character: are optional but some banks use them to assign codes for individual branches.

We are witnessing a new era of alternative SWIFT system announced by BRICS, but the main reason why this happens is the war against Ukraine where many nation around the world started to use sanction in hope to put the Russian economy on its knees. As the progress of sanction continue, United States and their alliance country agreed to ban Russia from international SWIFT system.
United Nation used its dollar and SWIFT system as a weapon against Russia. From that day on the new BRICS, system has started growing as a new alliance and new payment method who will challenge the West. This so-called move to weaponize the dollar has backfired and the old SWIFT system will get his new competition, build on a block-chain technology.

“This year governor of Central Bank of Russia, Elvira Nabiullina said Russia is leading discussions with other BRICS countries about developing a payment system to serve as an alternative to the current SWIFT system.”

The development of BRICS member countries has rapidly improve in last few months because of the ability to trade in their own currency. As the west sanction against Russia, get worse the BRICS nation block is getting stronger in any way challenging the EU and U.S. countries’ who have less power and reassures to fight the economic power of BRICS.
For some time BRICS has been making efforts to reduce the use of U.S. dollars in trade settlements. There has been an announced of new payment system for international transaction. The new infrastructure is now out of U.S. hands and BRICS nation with his new “SWIFT” system will challenge the west. This challenges the dominance of Western-led financial institutions and promotes a more multipolar world order.