Some
thoughts after reading an article in The Economist last week, about the pros
and cons of using SWIFT in enforcing international sanctions (http://www.economist.com/news/international/21633830-blocking-rogue-states-access-worlds-financial-messaging-network-potent-measure). An interesting article, basically highlighting
the dangers in ‘cutting off’ whole states or nations from international payment
infrastructures, under political pressure.
The article
describes that polital pressure is exactly that: political. And what is
politically correct for the US (isolating Russia for its intervention in the
Ukraine) is not for others. The other way around: what’s politically correct
for China (excluding Taiwan from SWIFT access) would not be for other
countries. Targeting individual banks or financial institutions which have
committed crimes is of course different, that’s directly related to terrorism
prevention. Although even in that field there are differences of opinion, to just
name 1 example: what is terrorism to Israel is a freedomfight for Hamas….
It points
out as well that shutting out nations by using SWIFT in that way could lead to
the creation of a rival. What the article doesn’t touch on is the fact a rival
already exists…… it’s called bitcoin.
If bitcoin
is here to stay, is left to be seen, but fact is that it has found a place in
the international payments industry. Bitcoin is still used as an instrument of speculation
by many, but focusing on that alone is ignoring the fact that actual
transactions take place in bitcoin. Half of which are linked to China. No doubt
that there will be legitimate transactions in bitcoin but it would have been
worthwhile to understand more about the nature, beneficiaries etc. of (certain)
bitcoin transactions.
Unfortunately,
unlike SWIFT which can give legislators and enforcement agencies access to
transaction details, bitcoin cannot. Creating that access would greatly help
the standing and acceptability of bitcoin as a transaction currency.
My view: infrastructure
is neutral and should stay that way. Don’t shut down the highway for all white
cars just because OJ Simpson drove one…
