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How the Disconnection of Russia from SWIFT Will Affect Belarus

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How the Disconnection of Russia from SWIFT Will Affect Belarus

Experts have analyzed the situation.

Against the background of recent statements in Russia about disconnecting from SWIFT, it is interesting to see the results of the annual general meeting of the SWIFT user group in Belarus, infobank.by writes.

At the moment, the SWIFT system in our country is used by 27 users, these are banks and other financial organizations.

SWIFT - Society for Worldwide Interbank Financial Telecommunications (SWIFT) is an international interbank system for transferring information and making payments. This system allows financial institutions around the world to send and receive information about financial transactions in a secure, standardized, and reliable manner.

It was founded in 1973; 248 banks from 19 countries were co-founders. SWIFT is headquartered in Belgium, near Brussels. SWIFT is a cooperative society, created under Belgian law, owned by its members. As of 2015, more than 11 thousand financial organizations in more than 200 countries of the world, including about 1000 corporations, are members of SWIFT. The average turnover is over 30 million messages per day.

The turnover of messages via this system in 2020 did not decrease, but, on the contrary, increased by 2%. In the global network, the traffic of financial messages increased by 10%.

And although Belarus accounts for only 0.1% of the world volume of messages via the SWIFT system, this system is important for settlements with foreign partners.

Top foreign countries with which Belarus has the largest number of messages via the SWIFT system:

Russia

Germany

Austria

USA

Based on this, it is clear that if Russia is disconnected from the SWIFT system, this will have a negative impact on Belarus as well.

By structure, messages from Belarus are distributed as follows:

94% payment messages

less than 5% are treasury messages (forex and precious metals markets)

all other types of messages take about 1% (collection, guarantees, letters of credit, securities)

Starting this year, the SWIFT system plans to significantly change its infrastructure. This is done to ensure that payments between countries are executed instantly and seamlessly.

It is also planned to provide access not only to securities, but also tokenized assets.

The system plans to speed up and facilitate the interaction for users; API access is also provided.

To help SWIFT partners, a special developer.swift.com portal has been developed, where there is documentation on APIs, a catalog of APIs, and various options for interaction.

The next changes will take place in November 2022, when a new version of the system will be launched; at the same time, the migration of cross-border SWIFT payment messages to the ISO 20022 format will begin.

ISO 20022 is a methodology for defining financial messages - in other words, a standard for standards.

It's not just about messaging - ISO 20022 provides a common language for computers and people to exchange information about financial activities. This common language is set out in a formalized vocabulary.

Accordingly, changing the SWIFT system will require improvements in the banking software from partner banks. The main thing is that by this time qualified personnel have not left Belarus.

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