SWIFT
SWIFT is the world's premier financial messaging network, connecting 11,500+ banking organizations across 235+ countries, processing ~45 million messages daily. Established 1973 as a Belgian cooperative, SWIFT claims neutrality but has become a critical instrument of financial statecraft.
The 2022 exclusion of Russian banks and repeated weaponization against Iran demonstrate how supposedly neutral infrastructure becomes a geopolitical weapon. Those who control SWIFT decisions—particularly US Treasury and EU regulators—have effective veto power over entire national economies.
SWIFT's neutrality claim masks three critical dependencies: (1) Primary data center in Virginia gives US Treasury direct access through TFTP (Terrorist Finance Tracking Program)—revealed 2006; (2) Belgian incorporation means EU regulations override stated independence; (3) Voting power reflects message volumes = Western bank dominance. When SWIFT initially resisted 2012 Iran sanctions, Congress threatened to sanction SWIFT's board members personally.
Key Facts
Power Dynamics
Member-owned cooperative with 25-director board elected by 11,500+ shareholders; shareholding adjusted every 3 years by message volume
US Treasury wields effective veto through TFTP access and sanctions threat. EU enforces through Belgian incorporation. Russia 2022 exclusion decided by US-EU coordination, not formal SWIFT governance
- US Treasury can threaten sanctions against board members
- EU can enforce regulations on Belgian entity
- G-10 central banks can restrict access
- US Treasury (TFTP access, sanctions authority)
- European Commission (legal framework)
- Money center banks (control voting through volume)
Revenue Structure
SWIFT Revenue Sources
- Message fees (per transaction) 45% →
- Value-added services 30% ↑
- Membership fees 25% →
45M daily messages
GPI tracking, compliance, sanctions data; growing 15-20% annually
6,000-15,000 EUR per institution
Depends on continued network participation. Exclusion of major banks could reduce volume 20-30%. Alternative systems (SPFS, CIPS, BRICS Pay) growing but not yet competitive
Unlike exchanges with trading volume dependency, SWIFT has inelastic demand—payments can't quickly substitute. But Russia/Iran developing alternatives; China's CIPS growing 40%+ annually
Decision Dynamics at SWIFT
Russia 2022: 5 days from invasion to excluding major banks; Iran 2012: 3 months from US proposal to disconnection
Strategic governance changes require 2+ years (quarterly board meetings, consensus needed)
US-EU alignment required; Belgian law compliance; geopolitical pressures often override formal procedures
Failure Modes of SWIFT
- Iran 2012: first sanctions weapon use, damaged neutrality
- TFTP 2006: exposed US data access, European backlash
- Russia 2022: 7 major banks ($700-800B flows) disconnected; ruble dropped 30%+
- Weaponization incentivizes de-dollarization
- Cooperative governance can't resist state pressure
- Virginia data center = US leverage
- Can't satisfy both US and EU when sanctions conflict
If SWIFT becomes too weaponized, major economies could coordinate parallel system adoption. CIPS grown 40%+ YoY; if CIPS reaches 30% SWIFT scale AND becomes interoperable with SPFS and BRICS Pay, monopoly breaks
Biological Parallel
SWIFT designed as cooperative immune system—neutral infrastructure all parties could trust. But weaponized by powerful actors against others. Like autoimmune disease: excludes banks to 'protect' finance, but real effect is geopolitical coercion. Organisms develop resistance: Russia built SPFS (immune evasion), China built CIPS (alternative immune system). The more weaponized, the more it destroys trust that makes it valuable.
Key Agencies
25 independent directors governing operations
Fed, ECB, BOE monitor risk and security
Real-time payment tracking, $300B+ daily