Summary of China presenta una alternativa al SWIFT

00:00:00 - 00:15:00

The video discusses the advantages and disadvantages of the Swift system, which is used to transfer money between banks across the world. The main advantage of Swift is that it is a fast and efficient system for transferring money. However, Swift is not available in many countries, and if a bank is not a part of the Swift system, then international transfers in dollars, euros, or other strong western currencies are impossible. This is why when you want to send money to another country, your bank will request the Swift code of the bank to which the money is being transferred. Swift codes consist of 8 or 11 characters and are unique to each bank.

• 00:00:00 The video discusses the advantages and disadvantages of the Swift system, which is used to transfer money between banks across the world. The main advantage of Swift is that it is a fast and efficient system for transferring money. However, Swift is not available in many countries, and if a bank is not a part of the Swift system, then international transfers in dollars, euros, or other strong western currencies are impossible. This is why when you want to send money to another country, your bank will request the Swift code of the bank to which the money is being transferred. Swift codes consist of 8 or 11 characters and are unique to each bank. For example, if someone wants to send money from Mexico to a relative living in Argentina, they need the Argentinian bank's Swift code and the transfer will pass through an American bank acting as an intermediary. However, if someone living in Mexico wanted to send euros to that relative in Argentina, those euros would first pass through an intermediary bank in Europe, as Mexican citizens are able to purchase Argentinian pesos. However, once removed from the importance of the dollar, we can return to the Swift code system which belongs to a international banking society with its headquarters in Belgium. It is estimated that between 3,000 and 4,000 members
• 00:05:00 China has unveiled a new payment system that is faster and more efficient than the Swift system used around the world. Swift has been criticized in the past for its relative inefficiency, for example, in 2018, the British financial magazine "Financial Times" noted that Swift transfers pass through several banks before reaching their final destination, making them slow and less transparent. Swift accepted the criticism and months later introduced a improved payment system called "Innovation of Payments Global" but it was only adopted by 165 banks out of the total of more than 2000 banks in use. The rest of the banks did not want to adopt it because each wants to get its own share of the pie. I'll tell my friend's story. A Latin American friend living in Russia wanted to send money to his home country via Swift but the bank in Latin America rejected it because it came from Russia and would be fined. He sent the money back to Russia but got 60 US dollars less because of it. The global financial system is based on the creation by the United States after World War II and during these years, America maintained its hegemonic dominance, not just as the world's first major power, but as the only major power. However, over the last few years, China
• 00:10:00 The Chinese alternative to the Swift financial system has been operational for just 7 years, but has already connected 176 banks from 6 continents and 47 countries. The system, known as the "SIPs," has been growing in popularity, with 1,300 banks and financial institutions connected to it as of 2021. Swift has good reasons to start worrying about its monopoly sooner rather than later, as its popularity among banks decreases over time. The switch to the Chinese system would not be necessary for most financial transfers between China and other countries. Just a few example countries include Brazil, Russia, India, and China itself. The Chinese believe that their global economic power should not last longer than 100 years, so the Swift system may eventually become obsolete.
• 00:15:00 China has announced an alternative to the SWIFT network, which could prove to be a powerful tool for the country's economy and financial stability. While it is still too early to tell how effective the China-based network will be, observers believe that the world must be prepared for China to become a truly active player in the global economy.