SWIFT not irreplaceable, but substitution requires considerable preparation

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SWIFT not irreplaceable, but substitution requires considerable preparation: former PBC chief

The international financial transaction system known as SWIFT is not irreplaceable, but replacing it will require a great deal of preparation, given SWIFT's efficiency and scope, Zhou Xiaochuan, former head of China's central bank, said on Saturday at an annual financial forum in Beijing.

Speaking at the 2022 Tsinghua PBCSF Global Finance Forum in Beijing, the former governor of the People's Bank of China (PBC) said that cross-border payments in global trade can theoretically be made without going through SWIFT. If SWIFT is widely used as a tool for sanctions, others will surely find other messaging conduits to continue doing trade, he said.

Global financial payment or messaging systems, should they slide into some "Cold War" patterns, would bring damage to everyone, Zhou commented.

The West's adoption of a financial "nuclear option" of using SWIFT to sanction Russia is a wake-up call for China's financial development. "We must get prepared," tapping the digital economy to ensure financial and trade security, Liu Liange, chairman of Bank of China, said at the forum.

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