[saul_goodman]

Very interesting, and the Bankers Almanac was something I'd never heard of before. We're all used to PayPal/Stripe/etc. working instantaneously because it's already inside the US system. While SWIFT seems decrepit, it explains how much trust is involved in banking; more-so for international banking. If there was not a person in the middle of international transactions banks would face a lot more potential fraud. If your bank went out of business because they participated in some dodgy international transactions you would be rightfully pissed off at losing all your money.

The Bankers Almanac also helps explain how "legit fraud" takes place, ie: how money can move around sanctions. It seems clear that by cutting Russia off from SWIFT probably stifles unrelated 3rd parties from moving around other road-blocks. Could also be something helping to clear the path to CBDC's: by removing major exit points to "Freedom Dollars"/cash.

[rjzzleep]

What you consider a feature I consider a bug. Whatever was the predecessor of SWIFT was, was probably not intended to cut people off of international settlements, it was intended as a way to establish trust between otherwise untrustworthy parties. It's kinda to normal banks what the BIS(bank for international settlements) is to central banking.

The very fact that one party can bully others to completely shut off parties from international banking is probably not what a lot of countries thought when they joined the system.

The Chinese' CIPS actually uses the SWIFT messaging system underneath, although I imagine China to be as neutral as the US/SWIFT when their own interests are at risk.

As much as I dislike Crypto what it is today, in a way the idea behind it is supposed to decentralize the trust system that is at the core of SWIFT. Otherwise you should consider that the only way you can have a truely neutral settlement party(i.e. a neutral SWIFT), is if it is run in a country that is strong enough to have a fully independent economy(already unlikely) and has enough military power to support itself. But then the latters interest in global power would probably directly interfere with the concept of neutrality.

[secabeen]

> What you consider a feature I consider a bug. Whatever was the predecessor of SWIFT was, was probably not intended to cut people off of international settlements, it was intended as a way to establish trust between otherwise untrustworthy parties. It's kinda to normal banks what the BIS(bank for international settlements) is to central banking.

> The very fact that one party can bully others to completely shut off parties from international banking is probably not what a lot of countries thought when they joined the system.

I don't know if that was necessarily the case. SWIFT was founded in the 1970s, during the cold war. I doubt any bank or country attaching to SWIFT expected to be able to use it to transfer money into the Soviet system. I can't find any easily available history of Russian connection to SWIFT, or whether that was before or after the fall of the USSR.

I would expect that any bank participating in SWIFT would expect that it is reliable and durable throughout the West, but that using it to connect with what used to be called the Second World would be best effort only, and could be cut off.

[elsjaako]

You mention cryptocurrencies as an alternative. But many/most of these have an open ledger. Isn't it possible for a government to sanction certain bitcoin accounts, making any bitcoin coming from them either worthless or less valuable?

[almostkorean]

That is mostly correct and a big issue with crypto in its current state IMO. If government blocks your off-ramps, it's possible you could still sell via a bitcoin ATM or find someone to do an OTC trade but those are obviously not ideal.

If we are talking ETH, it's possible to use zero knowledge proofs to send money and make it impossible to trace back to the source (see https://tornado.cash/). This also has some limitations, like you wouldn't be able to tornado 8 figures worth of ETH but certainly better than an OTC deal. It's also possible that the off-ramp exchanges could block any ETH that was sent through tornado. This gets hairy pretty quickly though, as the tornado ETH could easily be wash traded or mixed. Or it could be used legitimately, swapped for stablecoins, etc.

[gfdfddd]

if you were trying to block russia on ETH, and you were already blocking certain BTC addresses and it's "descendants" to the end of the blockchain... how many hours do you think ETH addresses associated with things like tornado would last? 24? 48?

all of crypto ignores the real world.

[almostkorean]

No idea what the actual numbers look like, but I think I see your point and think that level of overreach is unlikely to happen in most scenarios. If the government could track cash as well as they could track crypto, should a business or individual that unknowingly receives illicit cash be punished? It's certainly possible but I think it would be untenable in a country where people can vote. I also didn't expect Canada to freeze bank accounts before last month, so maybe I'm off base

[elsjaako]

What I imagine is them releasing publicly a list of "tainted" bitcoin. The government would consider it basic due diligence to not accept those bitcoins for payment.

If I buy a product from you, and I then transferred the payment to you through a US sanctioned entity, it would be your responsibility to not accept the payment. If you accept the payment, an FBI agent might come remind you of your duties.

In case of Bitcoin transactions, if such a law came into place, you might for example add to the contract that the payment in bitcoin needs to be made in non-tainted bitcoin.