Russia and Iran Ditch SWIFT for Local Currency Transfers: A BRICS Breakthrough

• Russia and Iran Ditch SWIFT System for International Transactions
• Moving Away from US Currency
• A Shift Initiated by a Ban
• Bypassing US Sanctions
• Establishing Direct Communication

Russia and Iran Ditch SWIFT System for International Transactions

BRICS members, Russia and Iran, have made the official decision to discontinue the use of the SWIFT system for their cross-border transactions. They will employ direct bank transfers for the settlement of international trade instead. This decision means that there is no longer a need for the SWIFT payment system for trade between the two countries. They have agreed to carry out transactions directly via their respective banks.

Moving Away from US Currency

These direct bank transfers will occur in the respective local currencies of the two countries, not the US dollar. However, it's important to note that these SWIFT-free transactions are exclusive to Russia and Iran, not involving any of the other BRICS members.

A Shift Initiated by a Ban

Russia and Iran were barred from using SWIFT in 2022 due to sanctions enforced by the United States. Although they were permitted to use SWIFT for some transactions, they have now decided to completely abandon it. The Central Banks of Russia and Iran are now taking steps to facilitate the process of direct bank transfers.

Bypassing US Sanctions

By completely bypassing the SWIFT system, the two BRICS members are effectively sidestepping US sanctions. The Deputy Head for the Central Bank of Iran and International Affairs, Mohsen Karimi, has confirmed that Iran has no further requirement for SWIFT.

Establishing Direct Communication

Karimi explained, We have connected the transmission systems of messages of the two countries to each other. Now, banks in both countries can communicate without the need for Swiss intermediaries. Commercial banks in both countries can establish intermediary relations with each other. The exporter can issue an invoice in Rials to the Russian side and receive money from Russian banks in Iran. This statement was issued to the Fars news agency.

Edited by Jonathan Stoker