Kremlin vows to quickly find a replacement for SWIFT

Russia will quickly find a replacement for the SWIFT payment system if it is needed, said Russian presidential spokesman Dmitry Peskov.

According to him, if SWIFT “turns to be unreliable”, an alternative to the international system of interbank payments will appear immediately.

"We live in such a developed world that alternatives, or by-pass substitutes for this system will be found very quickly. It is impossible to limit Russia in anything," Peskov said on the program "Big Game" on the government channel Rossiya 1.

“SWIFT is a dominant system, but only one of a few in this sector, and you can always find alternatives or workarounds”, Peskov assured. “In addition, if it were to be switched off, other countries would also be interested in using alternatives”, he said.

On Thursday, the European Parliament adopted a resolution urging the EU countries to disconnect Russia from SWIFT, to impose an oil and gas embargo, to stop the construction of Nord Stream-2 and to abandon contracts with the Russian Nuclear Agency, Rosatom, for the construction of nuclear power plants.

According to the document, which is of a recommendation nature, tough measures should be introduced if Russia invades Ukraine.

Russia has had its own alternative SWIFT system since 2016. It was created in 2014 after the annexation of Crimea and the collapse of relations with the West to ensure the smoothness of payments in the event of a SWIFT shutdown.

From 2018, foreign banks could join the Financial Messaging System of the Bank of Russia (FMS), but large Western players have not been enthusiastic about it.

In the list of 399 participants of the SPFS, published on the website of the Central Bank, there are only a few foreign participants. Among them are Isbank (Turkey), MUFG Bank (Eurasia) (subsidiary of Japanese MUFG), Credit Agricole CIB (France), SEB Bank (Sweden) and Toyota Bank (Japan).

The Russian authorities had high hopes for China. In August 2019, Russian Deputy Finance Minister Minister Alexey Moiseyev announced the signing of a memorandum on including Chinese banks in the FMS and the beginning of consultations at the level of technical experts.

After two years of negotiations, only one Chinese bank, the Bank of China, has joined the Russian payment system.

Currently, only 2 countries have not access to SWIFT, North Korea, which is experiencing periodic outbreaks of famine, and Iran, which is also subject to a strict oil embargo.

Since the restoration of sanctions in 2018, the Iranian economy has collapsed by 18%, the national currency, Riyal, has depreciated threefold, annual inflation has exceeded 50%, and the increase in food prices has reached 80-90% per year.

  Kremlin, Russia, SWIFT