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Russia Wants To Convince BRIC Partners To Create Alternative Banking System

This article is more than 8 years old.

Russia has decided it will take the lead in disrupting the dollar denominated unipolar world. It's first attempt is to create an alternative to the Society for Worldwide Interbank Financial Telecommunication system, aka the SWIFT code, which is a Western-led financial backbone dealing with $6 billion transactions daily.

Some anti-Russia European politicians have called on removing Russian banks from the SWIFT system. The reason?  Ukraine.  For a country no one has talked about since the days of the old Soviet Union, Ukraine has driven a wedge between Russia and the Western world. When Barack Obama was elected president six years ago, there was this notion of a coming reset of Russian relations. While there has been one significant bump in the road since, namely the Magnitsky Act which banned Russians involved in the death of Sergei Magnitsky, then a lawyer for an American-run hedge fund named Hermitage Capital, nothing has been as much of a canyon-sized rift as Ukraine.

As a result, Russia has been clamoring to figure out how to get on with life without Europe and the United States. It's turned to China, a trading partner that remains basically non-existent to this day.  But truth be told, despite the rhetoric, despite the fledgling Eurasian Economic Union, Russia needs Europe. And it probably doesn't want to shut its doors with the United States either, despite having very little trade with the country.

Russian president Vladimir Putin sees the world through a geopolitical lens, heavily tinted with the distrust of an old KGB spy. To Putin, everything Washington and Brussels does that remotely involves Russia is a coup de etat of some sort against Moscow or Russian pride.  Putin came out against the investigation against FIFA last week, for example, citing U.S. over-reach on matters of international law.  Russia is holding the World Cup in 2018. Again, some European politicians have called on Russia to lose its hosting privileges because of...Ukraine.

This weekend, Russia banned nearly 90 politicians from traveling to Russia, including those who wanted to ban FIFA from holding the 2018 World Cup there, and others who were behind the March 15 decision to extend sectoral sanctions.  Russia was slapped with sectoral sanctions in July and again in September.

And now, Russia is back discussing an alternative to the SWIFT system.

The Russian Central Bank (RCB) said Friday it will bring this idea of a BRICS SWIFT to its emerging market partners. Even if China agreed, the RCB knows SWIFT cannot be replaced.

"Seriously speaking, there is no (alternative) to SWIFT in the world right now. The only issue that might be of interest to all of us is to consider and discuss the possibility of creating a system that would apply to all BRICS countries to protect ourselves, used as a backup," Olga Skorobogatova said.