Asian Central Banks To Adopt Iran's SWIFT Alternative As De-Dollarization Accelerates

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by Tyler Durden
Wednesday, Jun 14, 2023 - 09:20 PM

In the latest shot fired in the growing rebellion against US dollar dominance, the nine-nation Asian Clearing Union (ACU) has agreed to use Iran's financial messaging system as an alternative to the dollar-denominated SWIFT system that has long served as the globe's financial nervous system. 

"The secretary general of the Asian Clearing Union (ACU) says Iran’s financial messaging system SEPAM will replace SWIFT, a dollar-based international system, in trade exchanges between ACU members beginning next month," Iran's IRNA News Agency reported.

At a Tehran summit in May, ACU members agreed to establish a SWIFT alternative within a month. The adoption of Iran's SEPAM will be an interim measure, as the ACU will develop its own messaging system over the next several months

Established in 1974, the ACU now comprises the central banks of India, Pakistan, Iran, Bangladesh, Myanmar, Maldives, Nepal, Sri Lanka and Bhutan. Belarus and Mauritius applied for ACU membership at the May summit meeting. 

Representatives of ACU's member central banks at the organization's May summit in Tehran (via PressTV)

Along with Russia and Belarus, Iran has been excluded from SWIFT as part of the US economic sanctions regime. Russia and Iran have established their own alternative connection, linking Iran's SEPAM with the Financial Messaging System of the Bank Of Russia. In May, Russian Deputy Prime Minister Alexander Novak told press that "approximately 80% of our mutual settlements are in national currencies: rials and rubles." 

The broad de-dollarization trend is the inevitable result of the US government's knee-jerk use of economic warfare to punish countries that resist its agenda. The quantity of US sanctions exploded by 933% between 2000 and 2021. 

You needn't be a current target of US sanctions to be attracted to non-dollar trade alternatives. "In the face of the American empire’s relentless and compulsive use of sanctions to punish noncompliance with its edicts, any rational government would be wary of the possibility of being targeted over some future controversy with Washington," wrote Brian McGlinchey at Stark Realities.

The ACU's move follows a growing assortment of other de-dollarization initiatives around the globe. As catalogued by The Cradle's Pepe Escobar, a sampling includes: 

  • China and France's Total trading liquid national gas in yuan
  • Russia and China using the ruble or yuan for more than 70% of their trade
  • India and Russia trading oil in rupees
  • Brazil's Banco BBM becoming the first Latin American bank to join China's SWIFT alternative -- the Cross-Border Interbank Payment System (CIPS)
  • 19 countries applying to join BRICS, the a geopolitical rival to the the G7 that originally comprised Brazil, Russia, India, China and South Africa 

As Escobar summed up the world-changing transition, "The Hegemon – clinging to a toxic cocktail of neoliberalism, sanction dementia, and widespread threats – is bleeding from within. De-dollarization is an inevitable response to system collapse. In a Sun Tzu 2.0 environment, it is no wonder the Russia-China strategic partnership exhibits no intention of interrupting the enemy when he is so busy defeating himself."