Chinese Alternatives to Swift and USD Trading

SWIFT is an acronym that stands for Society for Worldwide Interbank Financial telecommunication. It is essentially a system used to facilitate the transfer of funds via a bank account across the internet. It is one of the most widely used telecommunication systems in the world, linking over nine thousand financial institutions in over two hundred countries. SWIFT is the first aspect of finance that will be discussed in this article.

The second aspect of the world economy is trading in USD. SWIFT facilitates the easy transfer of USD, and the dollar’s eminence among world currencies as a stable currency to deal in has resulted in trading being done using USD as a norm in business to business transactions, as well as consumer to business transactions, regardless of where either business or consumer are located.

Both of these aspects of international commerce, SWIFT and USD trading have one thing in common. They are being targeted by China. China has made a largely successful transition into a major world economy, and has been working tirelessly in its attempts to assume the dominant role in international economics and commerce, this dominant role currently being held firmly by the United States of America.

China is attempting to overthrow the dollar as the most powerful currency in the world and simultaneously create a financial telecommunications system to rival and eventually overthrow SWIFT. Both of these plans go hand in hand, for this financial telecommunications system that China is creating will deal in only in the Chinese currency known as Yuan. This is part of China’s overall plan to destabilize the dollar.

China’s currency was once pegged to the dollar. However, as economic independence brought on a more powerful Chinese Yuan, China began to empty its foreign reserves of US dollars and stabilize its currency using investments in gold and other investments using its own currency. This created a shockwave of sorts that resulted in the devaluing of the US dollar due to the sudden surplus that drove the currency’s value down.

The Yuan is being increasingly considered a strong and stable currency, which is leading it to become a popular choice among businesses wishing to conduct trade using a neutral currency. This indicates that the dollar’s reign as the supreme currency is on the decline.

Additionally, China has been successful in securing the aid of Russia. Following the MasterCard and Visa account freezes in Russia following the incursion into Crimea, China was able to secure Russia’s use of its own credit card known as the China UnionPay. The UnionPay is now the most widely used credit card in the world, owing partly to China’s own immense population. Russia’s widespread usage of the card seems to indicate that American credit card providers are on the way out, something which will further devalue the dollar and increase the value of the Chinese Yuan until, eventually, China will complete its ascent and become the sole economic powerhouse of the world.