Taiwan would remain in the same international network for carrying out cross-border payments and would not be marginalized on the world stage, despite jostling among international powers, central bank Governor Yang Chin-long (楊金龍) said yesterday.
Yang made the remarks during a speech at an annual event organized by Financial Information Service Co (財金資訊), which oversees Taiwan’s banking, payment and settlement systems.
“The US dollar will remain the world’s major cross-border payment tool, given its high liquidity, legality and safe-haven status,” Yang said.
Photo: Chen Mei-ying, Taipei Times
Russia is pushing for a new cross-border payment system and highlighted the issue during a BRICS summit in October.
The existing system — the Society for Worldwide Interbank Financial Telecommunication (SWIFT) — is a cooperative established in 1973 in Belgium and owned by the banks and other member firms that use its service.
SWIFT’s coverage has grown increasingly more extensive and gained a competitive edge, helped by the Internet, Yang said.
Today, about 11,000 financial institutions in more than 200 countries are part of the SWIFT network, making it the backbone of international financial information transmission.
The SWIFT network neither transfers funds, nor is it a banking system. Rather, it sends payment orders between banks using SWIFT codes, he said.
Global transactions amounted to US$271.37 trillion in the first three quarters of this year, with the US dollar being the primary clearing currency, accounting for 47.5 percent, Yang said, citing SWIFT data.
Any uses in contravention of EU or Belgian regulations would be sanctioned after being reported to the SWIFT board. Serious contraveners might be cut off from the system, Yang said.
SWIFT became a means of financial sanctions by Western countries against Russia after its invasion of Ukraine in February 2022, Yang said. Russia was first sanctioned in 2014 after it illegally annexed Crimea and it has since then embarked on a “de-dollarization” campaign against Western countries, the governor said.
The BRICS countries are discussing the creation of a new financial payment platform called the “BRICS Bridge” in a bid to compete with and replace SWIFT, Yang said.
Taiwan’s payment system infrastructure is sound and all banks participate in the SWIFT network, the governor said.
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