The Society for Worldwide Interbank Financial Telecommunications is an international cooperative, headquartered in Belgium. Founded in 1973, it works as a global communication channel among its participants, in addition to standardizing international financial transactions. There are more than 11 thousand financial institutions, from 200 countries, connected.
Currently, most international interbank transactions, such as money orders and bank transfers, are carried out through the network SWIFT🇧🇷 This network allows the exchange of electronic messages in a highly secure environment, where each bank has its own address (code SWIFT🇧🇷 However, in order to carry out these transactions, it is necessary that each participant has a banking relationship with another, since the network only allows the exchange of information and not cash values.
What is SWIFT and why is it so important?
As Swift herself argues, no other organization than her can handle the scale, precision, pace and confidence that these international financial movements demand. Its system, developed to replace dependence on Telex, provides banks with a fast, secure and inexpensive form of communication.
The mechanism does not hold or transfer funds, i.e. it is not a payment system. However, it allows banks and other financial companies to inform each other about transactions that are about to go through. A Swift Code is a standard International Banking Code (BIC) format used to specify a particular bank or branch. All 11-digit codes refer to specific branches, while 8-digit codes refer to the bank's headquarters or main office.
What happens if Russia is taken out of Swift?
In practical terms, being removed from SWIFT means that Russian banks would not be able to use it to make or receive payments to foreign financial institutions for commercial transactions. It would be a huge operational headache. They could even resort to other means of communication – telephone, e-mail – or even develop an alternative system with partner countries, but security and volumes would certainly not be the same. Not to mention the investments and time required to build this new network.
Are cryptocurrencies the solution?
Using cryptocurrencies may be an option, but at the same time there are already a number of concerns about money laundering and terrorist financing hanging over these types of assets. Russian institutions could also resort to informal triangulations, with banks from allied countries doing operations on their behalf. China is an important Russian ally and could also develop a bilateral messenger.
Why has this punishment not yet been adopted?
Despite threatening, Western countries hesitate to apply this punishment to Russia because the country is a major exporter of oil and natural gas, and many European countries depend on this supply, especially to face the winter. Also, there could be side effects in other countries.
Speaking of our country, Angola currently has 35 banking institutions in SWIFT, where all passive codes (ie inactive) are excluded from the list. To see the complete list of all SWIFT codes for all banks in our country, just click on here
