The End of Swift Dominance

I’ve spent decades in the trenches of global finance. I started wiring millions of dollars around the world when a single Telex error could kill a financing deal. In my early days at Merrill Lynch and then Yorkton Securities in Vancouver, in the late 1970s and early 80s, international payments were slow, opaque, and prone to human error. 

In brokerage offices, Telex machines clattered away with messages that had to be deciphered like ancient scrolls. The word STOP replaced the period at the end of a sentence. GA meant “go ahead”and CFM meant “confirmed.” Security was so loose as to be laughable. 

Change was on the way. A few years earlier, in 1973, 239 banks from 15 countries had got together in Belgium and created something that would eventually displace Telex and become the backbone of international financial settlement: the Society for Worldwide Interbank Financial Telecommunication, or SWIFT.

SWIFT wasn’t built by governments or superpowers. It was a cooperative utility, born out of frustration with the old system. It standardized everything. Secure, formatted messages flew between banks with bank identifier codes, transaction types, and confirmation protocols. No more guessing. By the 1990s it had replaced Telex entirely, connecting thousands of institutions in 200 countries. Messages arrived in minutes, and payments followed—eventually.

SWIFT wasn’t technically a settlement system. It still isn’t. It’s purely a messaging network. Banks send standardized instructions over the encrypted system. The actual money still sloshes through correspondent banking networks, multiple intermediaries, central-bank real-time gross settlement systems, or clearing houses. It’s like sending a FedEx package that has to change planes in three different countries before it reaches your door. The package might get there, but the journey is slow and expensive, with many toll booths along the way.

Even today, a typical cross-border SWIFT payment takes several business days. When a South African manufacturer pays for German steel via SWIFT, multiple banks skim fees. Payment is in U.S. dollars, and foreign-exchange spreads add hidden costs. Transparency is a joke—you often don’t know the exact amount the recipient will get until the payment lands. Industry studies peg error rates requiring human intervention at around six percent. 

Despite its inefficiencies, the system works well enough when everyone plays nice. But when geopolitics enters the chat, it transforms SWIFT into an American bludgeon, as we saw in 2022. 

After Russia invaded Ukraine, the Western powers—led by the United States—expelled key Russian banks from SWIFT. The message was clear: play by our rules or lose access to the world’s financial plumbing. Overnight, Russia’s ability to receive dollar or euro payments for oil, gas, and commodities was crippled. The Kremlin scrambled and objected, but the precedent was set. 

Russia wasn’t a one-off. Iran had been partially cut off years earlier. Venezuela, North Korea—same playbook. Sanctions have always been used as coercion, but exclusion from SWIFT is the nuclear option. Because most global trade clears through dollar correspondent banks and SWIFT messaging, the U.S. Treasury has the power to freeze assets, block transactions, and isolate entire economies.

The sanctioning of Russia in 2022 sent a message to the world—especially to a rising power like China—that was unmistakable: your financial sovereignty is conditional upon our approval. 

As it’s turned out, that message was a geopolitical blunder of historic proportions. Every time Washington weaponizes the dollar, it accelerates the very multipolar order it fears. Russia didn’t fold; it built alternatives. China watched and accelerated its own China International Payment System, or CIPS. The BRICS nations—now expanded to eleven members from the original four—also saw the writing on the wall. Why remain hostage to a system controlled from Washington and Brussels when you can build your own rails?

Within months of being excluded, Russia went live with its own System for Transfer of Financial Messages (SPFS), a domestic SWIFT clone. It’s clunky compared to the original, and has fewer participants, but it works. It connects hundreds of Russian institutions plus 177 foreign participants from about 24 countries. These are mainly Russia-friendly nations in Asia, the Middle East, and the Commonwealth of Independent States (basically, former members of the old Soviet Union). 

The SWIFT system now has real competition. Nearly all domestic Russian financial operations run through SPFS. Today over 90 percent of Russia-China trade is settled in rubles and yuan, using SPFS and/or CIPS. 

Moscow is also pushing hard for BRICS Pay, a blockchain-enabled platform that would link SPFS, CIPS, India’s UPI, Brazil’s Pix, and other payment systems. A BRICS Pay prototype appeared in 2024–25; a fuller launch is planned for later this year. Russia’s digital ruble, CBDC, is expected to roll out at scale in September, positioned for cross-border use within this bloc.

China, for its part, is playing the long game on a different scale. Its challenge to SWIFT’s dominance centers on the digital yuan (e-CNY) and the China-led Project mBridge—a multi-central-bank digital currency platform. Unlike SWIFT, which only carries instructions, mBridge combines digital currency with distributed ledger technology— blockchain— to enable direct, real-time settlement without intermediaries.

Project mBridge launched as an experiment by the Bank of International Settlements Innovation Hub in 2021. (It later backed out, likely due to pressure from the west.) It encompassed China, Hong Kong, Thailand, and the UAE. Saudi Arabia joined in 2024. As of early 2026, mBridge has processed over 4,000 real-value commercial transactions totaling approximately $55.5 billion, with the digital yuan handling about 95 percent of that volume. And mBridge is growing fast.

Why? For starters, no pre-funded correspondent accounts. No multi-day float. 24/7 operation. Dramatically lower costs (fees average around 0.3 percent versus the traditional 3–6.5 percent). Bilateral e-CNY pilots with ASEAN counties and Middle East partners. As this digital monetary superhighway expands, it’s relegating SWIFT to the Stone Age. 

The United States has roughly one-third of the world’s countries under some form of sanctions—60 percent of them poor countries. mBridge, SPFS, CIPS, and the coming BRICS Bridge let these sanctioned nations trade oil in yuan, commodities in rupees, and settle in local currencies or CBDCs. All without dollar rails or Western oversight. 

The U.S. is not pleased. As these parallel systems grow, the States is losing one of the most powerful levers it’s had for decades: the threat of secondary sanctions that punish any bank anywhere for dealing with a sanctioned nation.

So what is America’s answer to this competition? Stablecoins—primarily USDC and USDT, which are issued by private companies—are stepping into the breach. Because they’re mostly backed by US treasuries, stablecoins don’t have the volatility of cryptocurrencies like Bitcoin and Ethereum. Unlike SWIFT, they don’t just send messages; they combine messaging, value transfer, and quick settlement on blockchain rails. Transfers settle in minutes, if not seconds, 24 hours a day. On-chain fees are often less than a dollar. End-to-end costs typically run under 1 percent, sometimes as low as 0.2–0.5 percent. 

With stablecoins, transparency is total, and smart contracts add programmability. In 2025, real-world stablecoin volumes reached tens of trillions of dollars, with business-to-business usage now accounting for about 60 percent of activity. Stablecoins work beautifully for remittances, intra-company treasury moves, and supplier payments.

Big banks have long made hay from SWIFT and correspondent-banking fees. That’s why JPMorgan, Citigroup, HSBC, Bank of America, and Goldman Sachs are reacting to these changes with a mix of defense, adaptation, and innovation. They recognize the risk: deposit outflows and fee erosion may reach as much as $6 trillion by 2028. Through groups like the American Bankers Association, they lobby for regulations that favor bank-held reserves and cap “yield-like” features on stablecoins.

That said, stablecoins are not a total replacement for SWIFT’s global ecosystem. They currently handle only a tiny fraction of total cross-border volume, face significant regulatory hurdles (such as MiCA in Europe and the GENIUS Act in the U.S.), and carry issuer risk along with on/off-ramp frictions.

It remains to be seen whether stablecoins will become a universally accepted mechanism for payments and settlements. Because they create sustained demand for U.S. Treasury—at a time when foreign central banks are actively de-dollarizing and the traditional need for petrodollars is waning—the success or failure of stablecoins will have profound implications for the future of the U.S. dollar.

While the SWIFT system continues to be the primary mechanism for global payments, America’s attempt to maintain geopolitical control through SWIFT is only making China and the broader BRICS bloc stronger. It’s accelerating the creation of parallel infrastructure that bypasses the dollar entirely. For investors, miners, traders, and anyone moving money across borders, take note: the old system won’t collapse anytime soon, but its monopoly is history.

Just as SWIFT displaced the Telex machines of my youth, digital currency innovations are changing the SWIFT settlement game. But these innovations don’t address another global problem. If the U.S. were a company, it would be seeking bankruptcy protection. All the while, its debt keeps growing and it will continue the regular printing of dollars to pay the interest and growing deficits. Over time, debasement—whether it’s the ancient Romans using less silver in their coins, or the U.S. churning out more greenbacks— destroys the value of a currency. 

The only lasting solution is to back all currencies — including digital ones — with something solid and scarce: gold.

In the meantime, the world will keep refining and inventing ways to bypass SWIFT and move away from the U.S. dollar system. This trend is unstoppable, and it will have profound, worrisome, unpredictable implications for the global balance of power.