What are the alternatives to SWIFT, and how are they faring? Explained
Nations in the Global South are exploring alternatives to the SWIFT payment system, including Central Bank Digital Currencies (CBDCs) and China's CIPS, to mitigate the impact of U.S. financial sanctions. While BRICS nations have discussed these options, technical and political hurdles remain for widespread adoption.
Why it matters
The potential shift away from the dollar-dominated SWIFT system represents a significant evolution in global financial geopolitics.
The story so far: The New Delhi Declaration that came out of the recent BRICS Summit in the national capital resolved to increase trade between member-countries and payments in national currencies. Days before the summit, a report by the news agency Reuters quoted sources as saying that at the event, India would push to link central bank digital currencies (CBDCs) for cross-border payments across BRICS nations, despite political and technical hurdles that could limit progress. The proposal to link CBDCs would be part of the agenda for the leaders’ meeting, the sources said, though the limited adoption of digital currencies globally could complicate implementation, the report added. The proposal was, however, not part of the Declaration.
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