The members of the Asian Clearing Union have announced the launch of a new cross-border financial messaging system to rival the SWIFT international payment network during the 51st Asian Clearing Union Summit held in the Iranian capital of Tehran.
“The Asian Clearing Union (ACU) – a nine-member group of central banks including those of India, Pakistan and Iran – has decided to launch a new cross-border financial messaging system in June, as an alternative to SWIFT, according to the Iranian newspaper Kayhan.
The daily cited Central Bank of Iran deputy governor Mohsen Karimi as saying the new payment system is capable of completely replacing SWIFT and could facilitate the global de-dollarization push.
The regulator reportedly stated last week that the new financial system will be used only by ACU member-states, but that others, including sanctioned countries like Syria, could apply for membership.
Belarus and Mauritius have already reportedly reached out to the union.
Speaking at the ACU meeting in Tehran last week, Central Bank of Iran governor Mohammad Reza Farzin claimed that dropping the U.S. dollar would help to protect member states’ foreign exchange reserves while still enabling effective settlement of bilateral trade deals.
Iran’s economy minister recently revealed that less than 10% of the U.S.-sanctioned country’s international trade was being conducted using the dollar, down from 30% two years ago.
Russia started developing its own national payment system when the U.S. first targeted the country with sanctions in 2014. Last year, when Moscow was hit by further sanctions in response to its military operation in Ukraine, including the blocking of many Russian banks from SWIFT, the government started promoting the domestic system as a reliable alternative. Russia’s SPFS ensures the transfer of financial messages between banks both inside and outside the country.
According to the Russian Central Bank, the system now has 469 participants, including 115 foreign entities from 14 nations”. -RT
The members of the Asian Clearing Union include the central banks of Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.
Belarus and Mauritius also applied for membership during the summit in Tehran in an effort by the Asian Clearing Union to admit new countries and diversify the assortment of currencies it accepts for payment settlements to help in the worldwide de-dollarization campaign.
Of course, the need for an alternative financial system to SWIFT was a foreseeable response to Western economic sanctions and threats to expel foreign adversaries from the SWIFT messaging system, as Iran’s economy minister recently revealed that less than 10% of the U.S.-sanctioned country’s international trade was being conducted using the dollar, down from 30% two years ago.
While the strategists at the helm of the United States government may have anticipated the submission of politically combative nations by threatening to impose restrictive measures, their ill-advised foreign policy decisions only resulted in the shaping and strengthening of newly formed competition designed to fuel the international rejection of the SWIFT financial system.