De-Dollarization Du Jour: Russia Backs BRICS Alternative To SWIFT

Tyler Durden's picture

Back in February, Russia detailed a SWIFT alternative that would link 91 domestic banks to the Central Bank of Russia.

On the one hand, the plan represented yet another move towards global de-dollarization but on the other, was borne out of necessity when Russia began to believe it may be expelled from SWIFT as punishment for its support of rebels in Ukraine. Prime Minister Dmitry Medvedev warned of “unlimited consequences” if the West decided on a punitive SWIFT freeze.

Two months later, Moscow would receive a seat on the SWIFT board.

Now, Russia is taking de-dollarization a step further by suggesting that a BRICS alternative to SWIFT may be in the cards. RT has more:

The Central Bank of Russia has proposed a discussion about establishing an analogue to the SWIFT global network for transmission of financial information that processes $6 trillion worth of communiqués daily.

 

The CBR hopes to cut the risks of possible disruptions.

 

"Seriously speaking, there is no analogue to SWIFT at the moment in the world, it is unique. The only topic that may be of interest to all of us within BRICS is to consider and talk over the possibility of setting up a system that would apply to the BRICS countries, used as a backup," said Deputy Governor of the Central Bank of the Russian Federation Olga Skorobogatova on Friday.

This comes as Russia (which, incidentally, is the second heaviest SWIFT user) is set to convene a BRICS summit in Ulfa on July 8-9 where the $100 billion BRICS bank will officially be launched along with a $100 billion currency reserve. Much like the China-led AIIB, the BRICS bank is in many ways a response to the failure of US-dominated multilateral institutions to meet the needs of modernity and offer representation that’s commensurate with the economic clout of its members.

This state of affairs isn’t likely to change anytime soon, because, as we discussed earlier this month, the The White House has signaled it will be unwilling to give up US veto power even if it means setting up and end-around that would allow the Fund to be reformed without the approval of congress. The Washington Post summarized the situation nicely after the 6th BRICS Summit last summer:

Although the BRICS comprise over one-fifth of the global economy, together they wield about 11 percent of the votes at the IMF. But reform to the governance of the Bretton-Woods institutions has encountered a number of roadblocks. In 2008 and again in 2010, quota reform at the IMF was intended to double total financial commitments from all member countries, while at the same time giving BRICS countries larger voting shares. Because this required additional contributions by member governments of richer countries, several balked for different reasons.

Russia is also pressing ahead with plans to establish a Eurasian currency union, something we first discussed a few months back. Here's what we said in March:

One person who is paying attention to the failure of the US to grasp that the unipolar world of the 1980s is long gone, is Russia's Vladimir Putin, who earlier today proposed creating a "Eurasian" currency union which would have Belarus and Kazakhstan as its first members, which already are Russia's partners in a political and economic union made up of former Soviet republics.

Sputnik News has the latest:

Russia is ready to consider the creation of a currency union with other members of the Eurasian Economic Union (EEU), Russian Prime Minister Dmitry Medvedev said Thursday.

 

"In this [EEU] format it would be possible to consider the possibility and conditions of eventually creating a monetary union,” Medvedev said.

 

The prime minister is currently in Kazakhstan for a session of the Eurasian Intergovernmental Council.

 

The EEU, which officially came into force January 1, 2015, comprises Armenia, Belarus, Kazakhstan and Russia. The bloc seeks to achieve greater economic integration, including the free flow of goods, services, capital and labor across its member states.

With that, we have triple-dose of de-dollarization, as Russia moves to undercut a critical financial communications link by creating an alternative system backed by the world's rising EM powerhouses who are set to officially launch their own development bank when they convene in July. At the same time, Moscow will consider cementing its economic ties with regional allies via the establishment of a currency bloc. 

Paging King dollar: your grip on the throne grows weak.

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SickDollar's picture

Here are your new bosses sheeple

 

 

XAU XAG's picture

USA

 

Will be the only ones left on swift

Latina Lover's picture

Not necessarily, sick dollar.

  Notice that the USSA asserted jurisdiction to lead the  FIFA arrests, despite the fact that  non USA citizens allegedly committed crimes in non US jurisdictions.  If the charges are valid, they should have been prosecuted under Swiss or EU law, not American Law. 

The USSA sole claim to jurisdiction is based on the supposed facts that bribes were paid in Fed Reserve Notes transferred through foreign banking systems.  If the FIFA officials had accepted Euros, Rubles or Yuan, the USSA would have no standing

NoDebt's picture

"Prime Minister Dmitry Medvedev warned of “unlimited consequences” if the West decided on a punitive SWIFT freeze.

Two months later, Moscow would receive a seat on the SWIFT board."

Fucking bankers.  No loyalty.

Latina Lover's picture

Sometimes the Banksters have to bitch slap their political puppets.

tonyw's picture

Note the "used as a backup,"  i.e. they will continue to use Swift unless action is taken to prevent countries from using Swift/conducting business. In other words they have a contingency plan - sound business sense.

Kirk2NCC1701's picture

"Loyalty"  LOL. good one.  Loyalty is something you might expect from your dog or spouse, and hopefully family, friends and Clan/Tribe members.

Oligarchs, Bankers and Rulers have NO Loyalty.  They are Opportunists and Apex Predators, who have only Agreements, Treaties and Deals, which are Alliances of temporal & situational Convenience.  It has always been so, no matter what bullshit they teach in school.

HenryHall's picture

Clearly overreaching. Does FIFA have a proposal to expel USA from FIFA?

nuubee's picture

not just overreach, desperation to get anything other than western elite failures in the media.

Latina Lover's picture

Just another USSA attempt at a coup, this time against a non profit/non political organization.

Freddie's picture

What is odd is they went after everyone except the guy at the top Sepp Blatter.

http://en.wikipedia.org/wiki/Sepp_Blatter

The issue of Israeli suspension has not been resolved. Sepp Blatter objects to the proposed suspension.

Latina Lover's picture

Because they don't have dirt on him, or because he is opposed to expelling Israel?  Interesting question...

SickDollar's picture

the whole FIFA thing is a joke , tell her to arrest the bankers who got caught about a week ago manipulating currency  and yet no one  went to jail , you cant make this stuff up)

As a sheeple try to create just one dollar bill, you will end up in jail for the rest of your life

 

 

researchfix's picture

Blatter is a Swiss citizen.
There are limits what the Swiss (pretent to) do for US.

Kirk2NCC1701's picture

But, but... Biden said that the US in not looking for Regime change in Russia

http://rt.com/usa/262573-biden-spheres-influence-russia/

... We’re not looking for regime change, or any fundamental alteration of circumstances inside Russia,” Biden said. “We’re looking for [Putin] to, in our view, act rationally [and comply with our rationale and world views].”

doctor10's picture

Biden lecturing anybody about "acting rationally" is hoot!

Howver his assertin that unless you agree with him or his administration, you're otherwise crazy/irrational, is of itself a demonsttration of a dementia of sorts.

kchrisc's picture

Three things about the FIFA thing:

1) They were strongly going to consider expelling Israel, over Israel's holocaust against the Palestinians, from FIFA in their upcoming meeting.
2) Their management was highly, as compared to other big sport entities, devoid of the Amongst. Meaning that Zion was feeling a bit left out in the plunder department.
3) Diversion for the sheeple from other, actually important, things.

Liberty is a demand. Tyranny is submission..

 

"If you don't see Zion, you're blind."

Lea's picture

" If the FIFA officials had accepted Euros, Rubles or Yuan, the USSA would have no standing"

YET another reason for stopping using dollars, even for crooks.

The USA loves to shoot itself in the foot, does it?

XAU XAG's picture

O R I

 

It's lonely at the bottom........................also

Oh regional Indian's picture

The real bottom is zombleland XAG...

XAU XAG's picture

zimbabwe did try and print it's way into prosperity.........

 

And the west is trying to follow, without the consequences.

 

Unless you meant zombies

And the west has zombie banks and corperates................and peeps that are flat broke and in debt up to thier necks.

 

Rate increases and it's all over

kchrisc's picture

"zimbabwe did try and print it's way into prosperity........."

Actually, the Zimbabwean thieves and psychopaths in charge of the money and violence tried to print their way to higher levels of wealth.

That worked for them, not so much for the people.

Ditto in the Zion controlled west and DC US.

Liberty is a demand. Tyranny is submission..

 

Guillotines. The cure for banksters and tyranny.

Latina Lover's picture

Point is, that the USSA will seize funds and prosecute under US domestic law for activities conducted outside of the US and by non US citizens.  In other words, it is open season on anyone who uses USD's for any reason that the Justice department does not like.

Realistically, FIFA was targeted because Russia was awarded the 2018 World Cup, and Quatar won the 2022 bid, over competing bids from the USSA, England and Australia.  Call it the sore loser syndrome....  Also, FIFA was to vote on expelling Israel.

Oracle 911's picture

That is the point. But you should consider these facts:

-SWIFT is based on US$ (it means for several ms the internationally transferred money exists as US$);

-FATCA allows this kind of extension of US law.

 

So now not just the BRICS nations will join that alternative, but also the rest of the world. Because the SWIFT and FATCA allows this kind of harassment.

 

IMHO the BRICS alternative is on the verge of the implementation. Because the Chinese and the Russians worked on their own, and something is telling me these 2 systems are compatible.

RadioactiveRant's picture

Poor persecuted Russians, when will they realise their homosexual waxwork model leaders Ukrainian adventure has cost them billions in not only money but in international influence. Gazprom alone is going to take a hit on the $29bn owed, anyone holding Ukrainian Gov Bonds will suffer huge write downs, and now theres a 50:50 chance no one will turn up to their “World” Cup.

My heart bleeds for them, I hope they've stocked up on buckwheat.

Latina Lover's picture

Look on the positive side RadioRant,  Crimea, a jurisdiction worth TRILLONS, is now part of Russia.  Sounds like a good overall deal to me.  If I were you, I'd let my heart bleed for the sad sack Ukie losers, having the worlds worst performing economy in 2015.  USSA, job well done.

JustObserving's picture
Ahead Of Israel Soccer Expulsion Vote, U.S. Orders Swiss Police Raid On FIFA

The Palestinian Football Association has called for a vote to suspend Israel from FIFA:

The vote requires a 75% majority of the 209 FIFA members. There was a good chance that it was going to be successful.

But now, just by chance, the U.S. government ordered the Swiss police to raid the hotel where the main FIFA functionaries are residing to arrest some of them on corruption charges going back to the early 1990s. The U.S. wants these to be extradited to face a U.S. court.

Also, just by chance, reporters and photographers of the New York Times happen to be in that very Swiss hotel lobby, at 6 am, to capture the incident live:

The vote requires a 75% majority of the 209 FIFA members. There was a good chance that it was going to be successful.

But now, just by chance, the U.S. government ordered the Swiss police to raid the hotel where the main FIFA functionaries are residing to arrest some of them on corruption charges going back to the early 1990s. The U.S. wants these to be extradited to face a U.S. court.

Also, just by chance, reporters and photographers of the New York Times happen to be in that very Swiss hotel lobby, at 6 am, to capture the incident live:

As an Israeli journalist already gloats:

Anshel Pfeffer

Poor Jibril Rajoub. Doesn’t look like his gimmick is going to get much attention right now #FIFA

Let me guess: That was a main purpose of this raid?

http://www.globalresearch.ca/ahead-of-israel-soccer-expulsion-vote-u-s-o...

Kirk2NCC1701's picture

Old news. They did a "180" since then, after the US Zionists put the DOJ squeeze on FIFA's Sepp Blatter...

http://rt.com/news/263229-palestine-drop-israel-fifa/

Palestine has dropped its motion to suspend Israel from FIFA, Palestinian Football Association president Jibril Rajoub said. A committee was proposed to monitor the situation between the Palestine and Israeli associations, which FIFA approved.

Speaking at the FIFA congress, Rajoub said he was dropping the motion to have Israel suspended from the organization.
"I have decided to drop the suspension," Rajoub said, adding that he instead proposes that free movement be ensured for Palestinian players.

BobPaulson's picture

The collapse of the United States will take longer than you expect, even with the assumption that it will take longer than you expect. The collapse of the British Empire is still underway. 

Latina Lover's picture

Nevertheless, he USSA is still collapsing, if slowly.

Oh regional Indian's picture

@ BobP....I think the massive and prolonged proliferation of massively powerful arms all over the world as the "hot-spot" has been moved around relentlessly since 1914 especially, has left a lot of people with a LOT of unexploded powder. Nuclear warheads on sale in the Eastern bloc and the failed states post 1991....

Point being that too many actors are now armed, some very very dangerously.

Also, think microbes, not Howitzers...

Kirk2NCC1701's picture

"The collapse of the United States will take longer than you expect, even with the assumption that it will take longer than you expect. The collapse of the British Empire is still underway."

+42.  One of the best posts of the day or month.  Alas, you will have a ton of pissed-off Libertarians and Doomers, whose biz models and livelihood depends on the notion of "Imminent Collapse".

I've learned the hard way, to take "The End is Near... buy beans, bullets and bullion" with a shovel of salt.  History shows time and again that (in the absence of perfect and timely information, or the ability to manipulate events) NOTHING beats being Diversified in Assets, Incomes and Risk Mitigation Plans. 

There are shills, hucksters, snake-oil salesmen, scammers and opportunists everywhere -- it's in the human DNA. Beware of financial Elmer Gantrys.

Latina Lover's picture

Given the continuous compounding of US debt, eventually the US will hit a wall, when the debt is no longer sustainable.  The 'Wall' will be hit when the rest of the world starts to reject the USD as a store of value.  If we define collapse as the replacement of the Fed Reserve Notes with something else, then this outcome is inevitable.  But this does not mean that the US will disappear, or even cease to be a very important nation.  Rather, we will see a relative decline in the stardard of living vis a vis the rest of the world, and less international influence.  Study what happened to the British Empire, to gain insight into  a reasonable roadmap of eventual outcomes.

Parrotile's picture

It's a bit difficult to compare the demise of the British Empire with the possible future of the US "Empire". Whilst there are similarities, there are very substantial diffferences. Factors that may have a bearing on the speed / extent of "demise" might include:

1. Post WW2 the majority in Britain still grew their own food to a greater or lesser extent (motivated by the "Dig for Victory" campaign, and generations of family gardening knowledge). Nowadays, especially in Metropolitan US (where there are even Ordinances banning "home growing" in some States I believe?), maybe "not so much", so the majority of the population are completely dependent on the JIT infrastructure model.

2.  Information dissemination was slow (letter post for the masses). Fast forward to today's "instant online info saturation" environment, and the ability for rapid and widespread information (or maybe dis-information) propagation is in a completely different league.

3. Loss of systems resilience via "savings on un-needed infrastructure": The provision of all major services (power / water / gas / wastewater) by profit-led Corporations has already been seen to result in failures due to cost-cutting, and lack of strategic investment (today's Corporate World prefers Share buy-backs, to CapEx).

4. Fomenting civil dissatisfaction "back home", with a generous helping of inter-racial distrust / outright hostility (demonstrated by many Globally-reported recent events).

5. Lack of (or more correctly, degradation of) population resilience, along with the growth of the "Career Unemployed, I'm a Victim, I've got Rights" mindset, and an acclimatised sense of "entitlement" very dependent on the position of the US $ as World Reserve currency.

Best to take each day as it comes. Tends to make life a whole lot happier . .

 

Kirk2NCC1701's picture

"USA will be the only ones left on swift".

Nah, its bosses (in London, Tel Aviv, Brussels and Bern/BIS), and its lackey1 nations will bend to the will of its Manifest Destiny 2.0

[1] Canada, Mexico, Japan, Colombia, Cayman Islands, Bahamas, Bermuda and most of the Caribbean.  And any place under the thumb of the CIA+DOD.

Q:  What d'ya think TPP is for?  A: To keep the USD as the GRC.  Duh!

Whether SWIFT or RIFT*, what's in Your wallet?

* Real International Financial Transfers

XAU XAG's picture

Same as the old bosses

 

But Putin does like ...........................Gold!

Latina Lover's picture

Not necessarily.  Notice that the USSA asserted jurisdiction over the FIFA arrests, despite the fact that  non USA citizens allegedly committed crimes in non US jurisdictions.  The USSA claim to jurisdiction is based on the supposed facts that bribes were paid in Fed Reserve Notes transferred through foreign banking systems. 

Oh regional Indian's picture

These are the days of miracle and wonder.

Perhaps we are watching the school bully eternally trapped in an empty playground.........losing it.

Urban Redneck's picture

This is slap at both the USSA and EUSSR.

Kirk2NCC1701's picture

Since when are alleged sports bribery cases cause for international extradition, and especially by "neutral" Switzerland?  They remained truly neutral for centuries for far, FAR worse criminal allegations.

Boycott Switzerland and anything Swiss.  Fuck 'em, if they won't stay neutral!

Anusocracy's picture

Switzerland stepped off a cliff when it gave the vote to the world's largest socialist bloc in the 70s.

Oh regional Indian's picture

Yes, but these are weak hands. India and China (real world) are not in good shape. At all.

India actually is pretty mightily fucked. A total dollar (IT outsourcing) dependent economy and Israel is our biggest defense contractor.

That is how it is on the ground. Brazil? Please. SA? seems to be going down pretty hard, still in post aparthied sell-out black people's grip (since Mandela, day 1).

More Kabuki.

Something is dying, perhaps SWIFTLY?

https://aadivaahan.wordpress.com/2014/05/15/mera-bharat-mahaan-ahhhaaaah...

 

KnuckleDragger-X's picture

The USA is driven by politics, but Russia is playing for the win. Their hand really isn't that strong, but it doesn't have to be with President Zippy and Ketchup-Boy on our side.....

Latina Lover's picture

Russia's hand in its sphere of influence is much stronger than the USSA. The State Department and CIA can overthrow the Ukie government in 2014, but can't win wars against Novorossiya, and  Proconsul Nudelman has utterly destroyed the Ukie economy.

Moreover, partnered with China, India and other BRIC's nation, Russia can stand up to the Global Bully. No wonder the Neocon's continue to foam at the mouth over Putin.

Freddie's picture

Maybe I am naive but it seems like Russia and Putin's approach to countries is - let's be friends, lets trade to help each other.

The USAA is telling  people what to do, threatening countries, then color revolutions, assasinations, and wars.

How has the US been towards Christians in Egypt and Syria versus Putin and Russia?   Iran and Hezbollah have treated Syrians and Syrian Christians better than the USA and their proxies.

The US actions have been a nightmare for Christians in Iraq.

KnuckleDragger-X's picture

Russia, like other countries are looking for advantage, but that's normal in the real world. The USA however has become world bully and demand the right to determine the course of the world in all ways. Obutthead&co. are pushing an agenda that requires subservience and Russia doesn't want to play and they are big enough that they can stand off the US. Also, they are picking up allies who don't want to play either.....

Latina Lover's picture

Freddie, this is how Putin operates, as a businessman in a business like manner.  Meanwhile the USSA is run as a mafia kleptocracy.

RadioactiveRant's picture

China and Russia will be facing increasingly restless domestic populations, they're going to come out of any crash much worse because nobody outside their territorial border have any confidence in their economies. Why do you think their own rich flock to London, New York and Vancouver?