China’s interbank system promoted as safeguard against Swift consequences
- A senior researcher has encouraged China to expand the use of its interbank transfer protocol, warning of risks in use of Western systems
China should promote its indigenous cross-border interbank system to reduce risks to its financial security, a senior researcher for a state-owned bank has said, as the drawbacks of a US-centred global monetary system have become too prominent to ignore.
The deterioration of China-US relations and repeated threats from Washington to kick Chinese commercial banks out of the global financial system means it is difficult for the country’s financial security to stay unaffected, said Yuan Benxiang, who works in the operations management department at the Agricultural Bank of China.
“At present, the drawbacks of the international monetary system dominated by the US dollar have emerged, and the credibility of the Society for Worldwide Interbank Financial Telecommunication (Swift) system has declined. Many countries are increasingly willing to seek alternatives,” wrote Yuan in an article published on Tuesday by the monthly Tsinghua Financial Review.
Yuan’s comments highlighted growing unease among Chinese financial institutions connected to Swift, a messaging system that facilitates rapid cross-border payments.
