There may be no swift end to this SWIFT debate.
Germany’s foreign minister, Heiko Maas, said late this month that there should be an alternative to SWIFT for international payments and that work on such a system has started. The overarching theme has been striving to end the sway SWIFT holds internationally.
Maas said, “We must increase Europe’s autonomy and sovereignty in trade, economic and financial policies. It will not be easy, but we have already begun to do it.”
The remarks touched off a firestorm, with debate over what happens — and what should happen — when SWIFT will have to cut off Iranian banks from the network by Nov. 4. That deadline is tied to economic sanctions against Iran (from the U.S.).
A new payments system may spring forth from the vagaries of geopolitics.
Those agitating for a separate international payments system have been stirred by efforts to preserve the Iran nuclear deal — a deal marked for withdrawal by the United States.
For Europe, the intent is for the deal to continue, as it buys Iranian crude oil and has other economic ties to the nation. Various sources, academic and otherwise, have noted that there have been ways to work around SWIFT to get money where it is slated to go, but the Trump administration has stated that there may be fines on SWIFT board members or curbs on banks doing business in the U.S.
But what might happen as the European Commission seems intent on developing a parallel system to SWIFT that would be Europe-centric in scope, spanning Europe’s financial system, complete with clearing systems and centered on the Euro?
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