Boosting its SWIFT alternative, Russia keeps members under wraps

In a speech to the country’s legislators, Bank of Russia Governor Elvira Nabiullina announced that members of Russia’s alternative to SWIFT would be kept anonymous. She said 52 institutions from 12 countries currently participate in the network.

Why should we care?
As more countries and institutions join this network, called the System for Transfer of Financial Messages (or SPFS), the more fintechs expanding internationally may have to deal with a parallel financial system. Russia’s Finance Minister, Anton Siluanov, thinks sanctions imposed against Russia for its invasion of Ukraine will accelerate the collapse of a dollar-based monetary system. "This pushes us to the need to speed up work in the following areas: the use of national currencies for export-import operations, the integration of payment systems and cards, our own financial messaging system and the creation of an independent BRICS rating agency," he said. German, Swiss, French, and Japanese banks have already connected to the network, according to a report by Coface, a French credit insurer. Those institutions may face pressure to remove themselves from Russia’s system if governments double down on sanctions against Russia. Especially if BRICS countries side with Russia’s alternative system, then fintechs and financial institutions alike may have to choose one system over the other—with complicated, if any, means to bridge the gap between the networks. This may be a major hurdle for fintechs looking to smoothen international payments and enjoy truly global adoption.