End Of Dollar? Russia And China In Works To Create New SWIFT System
On Sept. 10, First Deputy Prime Minister Igor Shuvalov of Russia announced that Russia and China are in the works to create an alternative replacement to the long-standing SWIFT system, and end for good the dollar as the sole reserve currency in the global financial system.
The SWIFT system was created in 1973 in Brussels, Belgium to coincide with the Petrodollar agreement made between Henry Kissinger and the House of Saud (OPEC) that same year.
Additionally, the U.S. has used the dollar and the SWIFT system as an economic weapon, as seen several times in the past where they cut off nations from access to dollar swaps under the guise of economic sanctions.
“Russian authorities wanted to decrease the financial market’s dependence on SWIFT since the introduction of the first U.S. sanctions, when international payment systems Visa and MasterCard denied services to some Russian banks owned by blacklisted individuals.
According to Shuvalov, Russia has been also discussing establishment of an independent ratings agency with China. Concrete proposals will be made by the end of 2014, he said.
As regards China’s payment system UnionPay cooperation with the yet-to-be-established Russian national payment system, Shuvalov said that UnionPay is ready for a full-scale collaboration and will provide all infrastructural capacities for that.” - TASS
For nearly a decade nations have wanted to wean themselves away from dollar dependence but have been unable to since there was no concrete alternative to facilitate their purchasing of oil and other commodities in a different currency.
In fact, when the U.S. sanctioned Iran with a cut-off of access to SWIFT to be able to sell their oil globally, the Iranian government used a work around system through Turkey, and bypassed the dollar and SWIFT completely by selling its oil for gold.
As the control over nations via the petrodollar has waned, the U.S. government has imposed greater and more draconian rules, regulations, and sanctions on foreign banks who do not wish to go along with U.S. national policies.
And while the last straw to this may not be FACTA, or the recent fining of BNP Paribas for transactions they did with U.S. sanctioned nations, Russia and China appear to have had enough interference by the Western superpower and have decided that to end the dollar and the global reserve currency, now is the time to create an alternative infrastructure that everyone can choose to use as they see fit.
End of dollar? Russia and China in works to create new SWIFT system