Tell HN: SWIFT is not a payments transfer system
SWIFT exists not for the purpose of providing the rail(s) upon which money moves but to be the messaging system which coordinates said transfers. When sending funds (typically done via a document called a MT103, which is a text file with specific formatting requirements) one informs the recipient institution by sending a SWIFT message. When it is time for the banks to actually move the funds (which often times occurs significantly after the funds are made available to the client in question) this will be coordinated through a payment system. In most cases in Europe, this is TARGET2. However, as Russia is not a member of the Eurozone, many of their impacted payments will likely be on the STEP2 payment network, which is the only European-wide clearing house. (However, these days, it isn't uncommon for banks to work together to use multiple clearing houses across multiple jurisdictions to most efficiently move funds.)
From what I understand from banks and clients we work with who have a significant Eastern European nexus, Russia was already experiencing problems with the payment systems before the formal SWIFT bans were announced and that the effective shutdown of central bank settlements for Russia has served to bring international payments coordination for RU based institutions to a crawl.
Happy to add clarification where it could be useful.
144 comments
[ 2.9 ms ] story [ 212 ms ] thread1 - there are other ways to coordinate payments!
2 - that the actual fund movement is handled through other means than SWIFT.
That said, things are changing significantly with SWIFT gpi payments and the much more automated nature of the new system may actually make techniques such as fake sends more, rather than less, effective until solid mitigation strategies are attached.
That doesn't sound impressive at all by modern standards. At the very least they should have some kind of challenge-response scheme.
The bigger point I should have made is that most send fraud doesn't actually occur on SWIFT and is conducted using falsified documents to give the impression of a correct send, typically to get funds released before the fraud is revealed. It relies much more on social engineering than any kind of actual systems hacking skill.
There are some additional hardware/special componentes one has to use to connect to SWIFT, those boxes arrive pre-configured at your datacenter.
However, as the other reply said to you... I've really not seen any evidence the SWIFT system isn't decently well constructed. When attacks (such as Bangladesh) have happened it has been due to not following best practices as established by SWIFT and other institutions.
For sure, the typical HN-mentality is: "there is no security and since this a dumb bank/financial-service, they are just trolling and they dont know what they are doing" - no, let me tell you that you are wrong with this assumption: SWIFT is pretty secure and there haven't been any larger (successful) attacks on the network itself (hint Central Bank of Bangladesh losing 90m in a CEO-scam is not a problem of SWIFT, same for similar cases)
Perhaps it was not in SWIFT's domain of responsibility. But it was for sure a problem for them and it's why they started CSP.
Yes.
https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
More common is to hack any bank connected to SWIFT, and send messages on the SWIFT network over that bank's SWIFT terminal.
This only based on the swift codes you have to add sometimes next to the IBAN.
Where a SWIFT MT103 would come in is typically (but not always!) much larger transactions, such as moving $100m from a corporate account in one country to another.
https://news.ycombinator.com/item?id=24103753
Indeed, as implied by the name.
“ Society for Worldwide Interbank Financial Telecommunication”
There will still be some facility to do it via China, but China's largest banks are also baulking (mostly because of the rapidly imploding value of the Ruble meaning they don't trust Russian banks to actually send the requisite funds than any great moral imperative I expect by the result is the same), and any Chinese services still willing to co-operate are going to extract a very, very hefty tithe from the Russians to enable it.
China would be keen on establishing and testing an alternative to SWIFT & CHIPS, the US stranglehold on financial systems, as they know the US would use it serve her geopolitical interests.
Looking at the number of countries sanctioned, there is no dearth of customers.
This reminds of Borg from Star Trek, more you use your weapons against them, faster they adapt.
Also I get it that SWIFT filled a need in the olden days, but with internet+messaging systems in general now available ww why don't banks use something more modern and less expensive? I am not hinting at blockchain. Eg they could use sth like email, telegram, some private incarnation of that, to send their MTx messages, or whatever.
Regarding your first question - ISO20022 currently requires a parser to convert ISO20022 information into a MT message. This is automated in SWIFT gpi and compatible softwares.
Well, I won't be surprised to see blockchains like XRPL, Stellar and Algorand to be part of the ISO 20022 standard [0]
[0] https://finance.yahoo.com/news/iso-20022-cryptos-5-compliant...
In addition to that, SWIFT has something called MyStandards, which basically enables financial institutions to create/share/use their own message formats. Insert XKCD-927.
The "legacy" SWIFT standard , called MT, was (retroactively) made into an ISO standard itself - ISO15022. Currently it is expected to coexist with ISO20022 on the same SWIFT network for 5 years, no idea which % of traffic is MT and which is ISO20022 though.
So anyway - The SWIFT network can carry either traffic.
As to why the SWIFT is not replaced.... it's not _that_ expensive, if you're a bank, and there is a huge network effect: If all your friends (other banks) are on network X, you really want to be there too, even if you maybe don't like too much how it's run and its cost.
Additionally, it provides a lot of convenience which would be really painful to reimplement - and it would be massively antieconomic to implement it unless you can spread the cost over as many participants as possible (so you're basically trying to create another SWIFT - and there are already plenty of alternatives, though none with the reach and trust SWIFT offers).
Said convenience is, for example, delivery confirmations, ability to replay any message up to 2 months ago, guarantee of every participant (bank)'s identity, non-repudiation. Oh and extreme resilience, which doesn't hurt.
But this misses the main value proposition, which I perceive as the trust in the institution: they've been doing exactly this job for longer than I've been alive, they're a neutral operator, simply carrying everybody's traffic and being truthful about what passes through their pipes. If you send a message through SWIFT, you won't be able to deny that, and the banking community will consider you committed to what you wrote. If you denied that you did, SWIFT would be able to replay the message (even without your consent, if coerced by authorities). And they will not agree to "lose" a message you regret sending - their entire value to the banking community would go to 0 in a moment.
Finally, they're a cooperative - participating banks actually own a stake, and profits just get redistributed (more or less), so it's not like they are sucking an inordinate amount of money away from the banking system and keeping it to themselves.
Interesting. That makes SWIFT sound like a sort of digital Hawala system.
Final settlement honestly may never occur.
There are some memes about that too. Convoluted arrows between a bunch of banks, next to one arrow between two peers.
I chuckled, thanks a lot. But numeric money and banking exchange is already based on trust, trust of correct and consistent traceability of exchanges being written by both parties. Hawala is solely based on reputation, and has the very convenient side effect that there is no traceability whatsoever. Doesn't looks like swift to me :)
https://www.treasury.gov/resource-center/terrorist-illicit-f...
This was why the 2008 financial crisis was such a risk; it's perfectly normal for banks to lend hundreds of millions to each other overnight to keep the payments system open, at near-zero interest rates because the risk is zero. But what if the risk isn't zero? What if there's a very real risk that your bank lends $100m to a bank that doesn't open the next day and you have to get in the bankruptcy credit line? Payments would have to slow down or stop happening or dramatically increase in cost.
Hence the decision to lend hundreds of millions to every vaguely bank-shaped object to keep the payments system running. It mostly worked, the money was almost all repaid (in fact I think it made a profit in the US?), and incidents of customers queuing at banks or collateral damage to businesses unable to make payments through no fault of their own was minimal.
2. With SWIFT in place, why do banks even need clearing houses? Is that merely to save the need for bilateral verifications that transfers have been registered?
3. At the bottom line, the "transfer" is just an agreement to decrease a fixed-with decimal value on one side and increase it on the other... we're not talking about physical movement of paper or bullion, right?
4. It's still a problem that SWIFT lets the EU (or EU+US) turn unilateral sanctions into global sanctions.
2. A number of reasons but mainly to do with how funds interact with central banks and their capital requirements. Your later point that funds don't PHYSICALLY move means that it's less about each bank recording the appropriate addition and subtraction (that's easy enough) and more about how it is recorded, so transactions can be properly audited and transfers that would cause systemic or institutional issues can be curtailed as much as possible. There's also the issue of banks being able to more easily manipulate books using off ledger funds if Central Banks/payments systems weren't involved but that's again a systemic risk issue and not really relevant to our discussion.
3. Correct.
4. I agree but I don't think that's going to improve any time soon and I've yet to see a system that doesn't trade one point of centralized failure for another. I do hope cryptocurrencies can solve the distributed exchange issue because that's actually one very attractive (potential) feature of crypto for me, as someone who has seen first hand how these systems can be abused to target people - deservedly or not.
This SWIFT ban only really affects the usual IBAN to IBAN transfer of the plebs and SMB's. Large payment processing and gross settlement transfers will just change to accomodating intermediary banks in China within a couple days, and that'll be that. Further fund movement will be done through the Russian-Chinese CIPS.
Never forget EU commissars are not elected officials, they are named by an totally informal group called "Eurogroup", to which supposedly only 15 EU presidents participate. However, as it's not formal, it's completely opaque how they get chosen.
But the other sanctions are an important part of the mix as well. No matter how you receive your payment instructions if your local government has banned the money movement it won’t go through (modulo money laundering & dodgy banks). This is we’re Chinas lack of sanctions might help. But what do you do as a large organization with the money in a Chinese bank now? You still can’t pay for EU goods with it.
The sanction mesh very effectively makes “high finance” for Russian corporations and international corps doing business there slower and more risky. Will it touch the trillion dollars Putin and gang have looted & hidden? Probably not but what could?
If you want to complain about something the carve out for energy financing is the big one. It shows that the EU wasn’t really ready to sacrifice to hurt Russia. Which is understandable in a real politik way.
That's my point and OP's : they didn't prevent it, just the messaging through SWIFTnet. TARGET2 and STEP2 still fully work.
Also, you can transfer batches of messages through FTP cronjobs and automated import at night, like it was done 20+ years ago. It just slows settlement from 1-2 days on average to 4-7 business days, depending on the correspondent bank.
Also, you can easily automate use the plenty free MT103 fields for additional routing data ex-SWIFTnet.
It's something which is often done - source : been there, done that, in my youthful days.
> “high finance” for Russian corporations and international corps doing business there slower and more risky.
Yes, anything in regards to transnational money. More expensive, too, but what's that in this inflationary world. A drop in the bucket of Moloch.
EU commissars are not directly elected officials, no, but they are also not "named by a totally informal group". 'EU Commissars' (typically called an European Commissioner) are nominated by their member state, one each. The European Parliament then votes on the whole. So they are still under democratic control: through the various chosen governments of the states, and through the EP.
The Eurogroup -- a discussion body for the 19 states that use the Euro as currency -- had nothing to do with the SWIFT ban. (it does have a bunch of issues from a democratic perspective, although it seems like most of the members are just their country's finance minister... which makes sense for a discussion forum about the Euro?).
> "named by a totally informal group"
I used the term "informal" from the legal point of view. I'll have a box of cookies of your choice delivered to your home if you can find me the treaty basis, or any other legally formal basis for its existence.
> "EU Commissars"
That was tongue-in-cheek from me, as related to Bolchevik buraucratic komissars - lovers of all things centralized.
> had nothing to do with the SWIFT ban
The Eurogroup didn't have it, correct, but the people it chose did very much so.
Similarly, what's that about waging war, which happened in the same bureaucratic breath yeasterday ? I don't remember J.Borell or Ch.Michel having been chosen as commanders in chief.
> So they are still under democratic control [...] (it does have a bunch of issues from a democratic perspective)
In the end, I'm partly Swiss, so I abhor my democracy being representative with a separation degree larger than n=1, or directly myself.
Could it be replaced by Email+GPG? Or ZeroMQ with Curve crypto?
Because whenever I have done wires, in addition to the bank/IBAN/account numbers, there are all these manual fields like "for further credit to", "for benefit of", etc. that are clearly having to be interpreted by someone. And very often errors come up and the funds are held or in limbo on one end or another.
Does anyone have a good explanation of what happens both on the initiating bank side and receiving bank side when a wire is done?
Does someone have to manually review an outgoing wire to allow it to proceed? Does the receiving bank have someone to review it inbound and route it correctly?
I imagine that this is why it still costs $25-40 to handle them.
With international wires, I am sure that even more complications exist with which currency it's to be settled in, etc.
And I have no idea/am curious whether the information about ownership of the account is transmitted with the transaction, to track whether the same person owns both accounts, etc?
Most Euro denominated payments (not sure I'd call them wires anymore) are also automatic, cheap and easy thanks to SEPA's wide proliferation.
Most of the time the extra info not actually required for automatic processing is in case the payment doesn't go through as intended, as well as for compliance reasons. As Elric notes above, international payments (outside a common currency zone with a system like Fedwire/SEPA) is where things get tricky/manual processing often comes into play.
Maybe it's local regulations defining whether a human should be part of the loop?
An explanation of what happens is at initiating and receiving banks is beyond the scope of anything I want to type.
At banks with high volumes, more processing is automated (see above) for low volume banks, not so much. Payments may fall out of automated processing for several reasons like poor instructions quality (unknown account number), complex correspondent/routing requirements, sanctions screening (OFAC in the US). For high volume banks, even with high STP rates, this can mean 1,000's of payments per day.
As for why wires cost so much, the answer depends on who is paying. The most frequent users of wires often pay very little for them because bank's provide wire services as a package in exchange for holding balances with the bank. Only retail customers and small businesses pay full price ($25-40) for wire payments, and bank's charge this much because they can. Retail is such a small part of the wire payments business that if you take you business elsewhere the bank does not really care.
One last note on pricing. Most wire originate from the same set of bank customers on a regular basis, so their processing is highly automated and the bank's risk and fraud systems are trained to expect these payments. Occasional payments from retail customers probably do require manual processing more often, so a higher price is probably warranted to some extent.
As a user outside of Ukraine you cannot send money directly to accounts in Ukraine (unless your bank handles it specially). However, what you can do is send money directly to the Ukraine central bank (!!!) and in the memo field, specify which account should be credited.
That is how I assume all interbank transfers would operate without SWIFT. Couldn't tell you why Ukraine uses this system since they're not banned from it.
Fedwire is arguably the main settlement system used in the US between banks that participate in the federal reserve, when correspondence accounts are not in use. (Even other systems that claim to be settlement systems seem to often end up using FedWire for final settlement). The actual settlement is simply a debit and credit in the bank's accounts with the Fed. But while that does technically settle payment, in practice more information is needed, as the bank's accountants need to know what this was for, so they can keep their accounts up to date. Therefore metadata can be attached to the transfer. Without that it would be more complicated to figure out what exactly just got settled.
But when one is trying to send money not just between banks, but between customers of banks, even more metadata is generally needed. You are correct that at least in theory, the field for the target account would clearly who is getting paid. (Obviously the org receiving the wire will often generally need some additional metadata about what the payment is for, in much the same way banks do, hence the use of fields like 4320.)
I suspect that the receiving bank's handling is usually mostly automated (especially with larger banks), but that there are some safeguards that sometimes stop things for manual review both for correctness concerns (like making sure the name of beneficiary is even remotely close to the name associated with that account number) and for security considerations (flagging suspicious transactions to have further verification). And of course, if things are incorrect and things are not caught by the safeguards, it requires human effort to fix.
The receiving organization's steps seems to often be at least somewhat manual. (But this can vary, orgs that receiving thousands of transfers a day likely automate more than those that receive just a few.) I get the feeling some organizations with the capability of automatically processing most incoming wires simply don't, because having a person look at the incoming wire, and review what the automated processing will do before clicking an "approve processing" button can catch other mistakes, some of which could be a pain to unwind manually.
You are probably more educated on this, but I'm an Iranian and Iran was the only country so far that was banned from SWIFT. And it was a very very big deal. The banks could not deal with anywhere in the world and it become very difficult to send or receive money.
The EU tried to setup an alternative to SWIFT [0] so they could work with Iran but it didn't really work out.
[0] https://en.wikipedia.org/wiki/Instrument_in_Support_of_Trade...
One would obviously hope that the cumulative effects of the various sanctions make it difficult or impossible for Russia to continue with business as usual.
However, part of me worries about the abilities of the oligarch network.
I mean, if you look at the various flight tracking websites. Sure a lot of the commercial aviation traffic has been killed off, but there are still large numbers of private jets floating around in and out of Moscow. How is this possible ? Because the sanctions are only against Russian registered aircraft, and most of those private jets are registered elsewhere and/or are hidden behind charter companies registered elsewhere.
Quite possibly this extends to finance ? I imagine there is potential to find alternative financing routes. It wouldn't be able to last forever, for sure, but might last longer than the West anticipates.
Here SIGINTEL can contribute a lot but also just better data pooling between the countries and more modern methods of detection.
This international commitment to combat money laundering has so far been lacking but it seems this invasion is giving the momentum needed to put such systems and collaborations in place.
It will still take some time though before it's in place.
Or, it could be a strategic hedge to ensure he retains control of the jet.
Either way, the sanctions are causing an effect, and by all accounts a significant one. Battles are won or lost by explosives, inexplicably awful things and largely brave men being sacrificed, by their choice or others. Wars are won or lost by economics.
If the sanctions are harsh enough, is there potential for a military response?
Binary “is there a risk” questions are mostly not useful, because the answer is almost always yes.
now translate that to international cross-border transactions and we have a bypass. do iranians accept crypto as in other countries (to be fair, even india is far far behind but the recent acceptance by imposing tax is seen in a good light overall)
I don't think it's so much that, but the UK and US bans on dollar clearance for banking which happened a few days before the SWIFT block actually did 90% of the work that the SWIFT ban is getting the credit for.
It's like turning off the metadata layer two days after putting an axe through the ethernet cable.
The ban makes it much harder to make settlements.
[0] https://twitter.com/M_S_Billingslea/status/14984295311951544...
Also, in Iran's case there's the FATF issue which doesn't yet exist regarding Russia.
It's pretty hard to take all $80Bn from a foreigner. Especially without destroying a lot of value for other people.
Except in the UK, where they fund the tory party so there's very little being done.
Boris Johnson has been the most outspoken voice outside Ukraine for increasing sanctions against Russia. He's already announced freezing assets of all Russian banks and 100 other people or corporations,[1] and he led the charge of getting Russia cut off from SWIFT.[2] Germany and Italy were the ones opposing it since they are dependent on Russia for energy.
[1]: https://www.bbc.com/news/uk-60515626 [2]: https://12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2...
https://www.opendemocracy.net/en/dark-money-investigations/u...
I'm a pretty big BoJo hater. But Londongrad existed long before BoJo - don't blame it on him.
So far BoJo has been leading the US and the EU in pretty much every form of support.
He's sanctioning the ones who aren't funding everything he does, anyone giving him money is still absolutely free to do as they please. Just because that man says he's doing more than anyone else, doesn't mean he is. In fact, it's generally safer to assume truth is the opposite of what he claims publicly.
[0] https://www.opendemocracy.net/en/odr/uk-russia-sanctions-ukr...
A world without blockchain - How (inter)national money transfers works
https://media.ccc.de/v/33c3-8315-a_world_without_blockchain
I guess they might be affected once Russia starts borrowing the cash from citizens to fund the war.
But "slightly" might be useful to the Russian government given the game plan seems to be to try and complete the invasion before the Russian people mass revolt against their own government as the price of bread goes up 10,000%.
Money in banks is in the end just information stored in ledges about who owns who money. If a transaction occur within a bank it just numbers of one account getting an relative change to an other account. If an transaction occur between banks, the banks has a relation and the bank own ledger get changed, in addition to the individual accounts. With a clearing house you add a middle man that takes up part of the risk if either bank would fail in their obligation to honor the ledger. The actually movement of physical funds and valuables is quite rare and don't general occur from single transactions.
If you can't transfer the information then the system of transferring information stored in ledges stop working. One can go out-of-band, but that assumes the other party is also willing to do so, and that there is no law/agreement against by-passing sanctions.
It's not. At least not in the short term.
When I send a message to the other US bank saying "Hey, I sent you $1,000,000. Of that, $10,000 is for John Doe, $10,000 for Jane Smith, $5,000 for Alice, $5,000 for Bob, ......" that's SWIFT.
A "bank day" is basically the sum at the end of the day that bank A own to bank B. No physical money get transferred unless the US Federal Reserve requires it, which if both banks has fairly similar outgoing debt to each other the accounts won't change by much. the US Federal Reserve don't see the "$10,000 is for John Doe, $10,000 for Jane Smith", only the sum of all transaction going from A to B or B to A.
Bank A tells bank B that "I told the US Federal Reserve to update your account by +$1,000,000 and reduce my own account by same amount, and you can verify this by talking to the US Federal Reserve and checking your account. The items that those +$1,000,000 represent are listed here. John Doe get $10,000, Alice get $5,000, ...". This occur through the SWIFT protocol. Bank B then do the same by first telling US Federal Reserve and then giving bank A the list of the individual items.
The US Federal Reserve don't really transfers money. They simple managed the ledgers for banks relation with other banks. What occurs is simply a ledger being updated about how much bank A is in dept to bank B, and wise verse. The federal bank will step in if a bank defaults, or I guess if the differences between A and B becomes too great to manage.
It allows for efficient communications between parties. You can use other forms of communication to arrange for the movement of money, but they're more of a hassle.
50% payment messages
43% securities messages
The rest are a mix with a lot being treasury transactions.
I work on the investments side and use SWIFT for security transaction settlements. For example, when we trade a security (stock, bond, derivative, etc) we send an ISO 15022 formatted message over SWIFT to the custodian telling them to expect delivery (for a buy) or to deliver (for a sell) a particular security on the settlement date.
If we don’t give them this message then their settlement group will DK any securities being sent to them that don’t match a notification. (DK = Don’t Know) which means the trade will fail and you’ll have some really pissed off people that will want you to make them whole if they lost money as a result.
SWIFT is used for lots and lots of things, not just payments.
Strongly disagree. The media are for laypeople. You wouldn't appreciate complex breakdowns about how proteins in SARS-CoV-2 work, too much depth.
I also disagree with the implication that a SWIFT ban is meaningless.
SWIFT is a notification of intent to settle. Modern banking (read: the electronic age) moves MUCH faster than money does. You can see this in ForEx. By the time the money arrives, it's worth something else. This is risk exposure and is partly why most banks like to backout into their native currency. Not always the case, but still a useful line.
Banks exist to provide 2 major services.
1: Trust. Doesn't matter what so-and-so claims, their bank are the ultimate gate keepers. If the bank says it's paid, that's a legally guaranteed promise.
2: Liquidity: You actually need to have money to be able to send it. Banks will let you use "their" money while your money is still actually arriving (settlement).
As you rightly pointed out: Banks make this money available to you before it actually arrives. The only way they can do that is because of #1: They trust the settlement will happen.
If there's no trust, there's no releasing of funds. If there's no SWIFT message, there's no incoming settlement. TARGET2 can be used without SWIFT, but good luck finding a lot of banks that will handle CIPS in place of SWIFT.
But by FLATLY removing Russia from SWIFT, they have successfully killed transactions in BOTH directions. Money can't come in, money can't go out.
There are arguments to be made about the efficacy of these decisions (nobody believes the vast majority of Russians voted for Putin, right? Cuz they certainly did not so pressuring them to once again not vote for Putin seems pretty stupid, but the west can't do literally nothing. Difficult problem) but this was an effective move to further crush the ruble.
Vast? No. Majority? Most likely.
You do not need to take my word for it, you can look for 1st hand accounts from people who were P. election observers from the opposition.
I'll at least agree that nobody believes that the party in power had the majority votes nationwide in the 2 most recent national elections.
As for the current events, most recent official (official being the key word here) nationwide polling shows 68% support for the "special war operation", which I do not believe for a second, considering how many have either relatives, friends, or at the very least business contacts across the border.
what russia is doing is terrible and should be stopped. But this incident is going to show that the US and the EU can no longer control the worlds trade. technology has evolved past these financial systems mared by corruption, false data and glacially slow payment transfers. Who needs swift, clearing houses and forex exchanges when you have Terra?
Side tangent, the first nationstate to adopt crypto will have the biggest benefits.
China is spending alot of time rolling out its digital currency among it's populace. What is difficult to trace about it? It's literally a public ledger...? If you institute a state controlled wallet, not only can you control flow, color of money, etc. but you can perfectly see the data in real time which is a tremendous improvement over the current infrastrucure. You can actually answer questions like, how much does the average citizen spend a month on XyZ with a simple query among your wallet.
> I'm sure Putin himself is setting up a Coinbase account as we speak...
You are cut off from swift and other internationally accepted banking measures. How do you get foreign currency into your nation and how do you transfer payments internationally? Crypto.
Just a month ago China and Russia made a 30-year deal to sell/buy gas through a pipeline. Settled in Euro!
https://www.reuters.com/world/asia-pacific/exclusive-russia-...
Russia wouldn't trust the yen. People in China can't freely exchange to other currencies (or move money out of the country). The yen is being held together by a "captive audience" (or a subjugated people).
And China won't trust the Ruble, because well, it's obvious, right?
The idea that you'd make a 30-year deal settled in bitcoin/eth is plain crazy. Trust is hard to build (it takes time), when neither Russia or China has that level if trust, what makes you think crypto would get there tomorrow?
Russia is being blocked from the wests financial system by making harder to transfer funds. Crypto can make international transfers.
You think they would use bitcoin/eth instead?
I don't fully understand banking systems, but if China buys something from Russia in dollars. They are not paying with truck loads of cash. They might pay with IOY in a Chinese bank. But Chinese banks might not want that liability (buying dollars could be expensive in the future; and certainly Russians won't trust a Chinese bank.
They are probably moving dollars between a US account belonging to a Russian bank, and US account belonging to Chinese bank.
Moving large amounts of dollars (or euros) by other means is very hard.
Gold, bitcoin, eth, etc. are all more volatile than dollars (or euros), and harder to move.
For example, I've always been curious how Swift is routed at the lowest layer. Does it go through the normal internet? The telecommunications infrastructure? Custom fiber-optic cables connecting almost every bank in the world to some kind of central office?
The media, in general, does a very poor job explaining anything and everything, but due to the fact that the vast majority of people have no clue whatsoever, nobody ever really notices.
That's why it's so easy for mass media to manipulate people. Nobody ever really notices that either.
Except for people who actually know, of course. Like yourself.
But then you, OP, you, turn the page, keep on reading and believe everything else that's written:
https://effectiviology.com/knolls-law/#:~:text=Knoll%27s%20l....