Actions of the West in Eastern Europe and ongoing pressure on Russia may eventually intensify the movement to combat the petrodollar. The biggest danger to the oil currency is likely to be related to China and its plans to increase the role of the yuan in the world.
Russia and China currently discuss the creation of a system of inter-bank transactions, which would be an analogue to the international system of bank transfers – SWIFT. This was announced by First Deputy Prime Minister Igor Shuvalov after talks in Beijing.
“Yes, this idea was discussed and supported,” he said, when asked about the possible creation of an analogue to SWIFT in bank transactions between China and Russia.
SWIFT is an international interbank information transfer and payment system. The system is also known as SWIFT-BIC (Bank Identifier Codes), BIC code, SWIFT ID or SWIFT code. The system was founded in 1973; 239 banks from 15 countries acted as co-founders.
SWIFT is an association established under the Belgian law. More than 9,000 banks from 209 countries (as of 2010) act as founders. Headquartered in Brussels, Belgium. The number of SWIFT users exceeds 10,000 organizations, including about 1,000 corporations.
Each bank in the system has a unique SWIFT-code. To make a payment in Europe, it is enough to know the SWIFT code of the bank and the IBAN-code of the recipient. SWIFT processes over one million remittances daily.
After September 11, 2001, the CIA and the US Treasury gained access to SWIFT information. Annually, SWIFT processes about 2.5 billion payment orders.
Curiously, the UK proposed limiting Russia’s access to SWIFT for only two weeks. Russia once again shows that it may abandon the dollar, if necessary, on its own terms.
The Russian authorities intended to reduce the dependence of the financial market on SWIFT after the first wave of US sanctions, when international payment systems Visa and MasterCard refused to work with a number of Russian banks.
According to Shuvalov, Russia also discussed the creation of an independent rating agency with China. Specific proposals are to be made by the end of 2014.
With regard to China’s payment system UnionPay, which is expected to become one of the partners of the Russian national payment system, the system is ready to cooperate fully and provide necessary infrastructure.
“As for the payment system, it is clear what to do and how to move on, then the settlement system by analogy with SWIFT is an idea that we all liked today. We proposed it, and took it positively. We will begin to work it through,” said the first deputy prime minister.
All this indicates that the Eurasian Economic Union will gradually abandon the dollar. Barack Obama’s presidency may go down in history as the time period, when the dollar began to lose its influence. Obama already faces accusations of destroying the foreign policy of the United States, let alone the fact that he is referred to as the worst president in the history of the United States. The end of dollar hegemony will undermine the status of the world’s reserve currency, which will trigger the fast and uncontrolled collapse of the American empire, zerohedge.com website said.
As soon as Russia and China show that it is really possible to abandon the dollar, especially given the fact that the United States is pushing for this, other countries will follow their example.