Russia should consider abandoning the use of the Western-controlled global financial messaging system SWIFT, according to Andrey Kostin, the CEO of VTB, Russia’s second-largest bank. Kostin has been advocating for increased use of domestic currencies by Russia and its trade partners, citing the necessity brought about by sanctions. He made these remarks at the International Banking Forum in Sochi, stating that killing SWIFT in transactions would require action from individual countries.
Kostin pointed out that Russia already conducts most of its payments in national currencies, particularly in trade with countries like China, Indonesia, India, as well as Arab and African states. He emphasized that a significant shift towards financial settlements in national currencies with the Global South is already taking place.
The banker argued that this shift is irreversible, as more countries realize they could become targets of political manipulation through the use of the US dollar and euro by Western powers. In an interview with RT, Kostin proposed that the Global South establish a new financial system based on national currencies to mitigate the risks posed by the West. He clarified that the goal is not to fight the Western financial system, but rather to build a parallel system that benefits the Global South.
Kostin’s call for abandoning SWIFT and increasing the use of national currencies is part of a broader trend among nations seeking to reduce their reliance on the US dollar and Western-controlled financial infrastructure. Countries like China and Russia have been actively promoting the use of their own currencies in international trade to reduce exposure to potential sanctions.
The SWIFT system, based in Belgium, is used by banks worldwide to securely transmit financial transaction information. However, its centralized control has made it vulnerable to potential geopolitical disputes. In recent years, the US has used its control over SWIFT as a tool to enforce economic sanctions on countries like Iran and Russia.
The push for de-dollarization gained prominence after the US imposed sanctions on Russia in 2014 following the annexation of Crimea. This move prompted Russia to develop alternative financial systems, including the establishment of its own national payment system, SPFS, and the introduction of the MIR payment card.
By conducting more transactions in national currencies, Russia and its trade partners aim to reduce their vulnerability to Western sanctions. Additionally, this shift can foster closer economic ties between nations, opening up new opportunities for trade and investment.
While the transition away from SWIFT may face logistical challenges and resistance from the US and its allies, Kostin believes it is crucial for Russia and its partners to pursue this path. The increasing adoption of national currencies in global transactions could gradually erode the dominant position of the US dollar, leading to a more multipolar international monetary system.
In conclusion, Russia’s second-largest bank, VTB, CEO Andrey Kostin has called for abandoning the use of SWIFT and increasing the use of national currencies in transactions. He argues that this shift is necessary due to the risks posed by Western sanctions. By conducting more transactions in national currencies, Russia and its trade partners aim to reduce their vulnerability to geopolitical disputes and foster closer economic ties. While this transition may face challenges, it aligns with the broader trend of de-dollarization and the pursuit of a more multipolar international monetary system.