By Lot Ndamanomhata
What It Is and Where It Sits
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a Belgian banking cooperative providing services related to the execution of financial transactions and payments between banks worldwide, serving as the main messaging network through which international payments are initiated.
Crucially, it does not manage accounts, hold funds, or perform clearing or settlement, it carries payment instructions, while the actual money moves separately through correspondent banking relationships or settlement systems such as TARGET2. It functions as the postal service of banking, not the bank itself.
SWIFT was founded on 3 May 1973 and is headquartered in La Hulpe, Belgium, near Brussels.
It is a global cooperative owned by its member banks and governed by the world’s central banks, including the National Bank of Belgium, the US Federal Reserve, and the European Central Bank, a governance structure that becomes important when considering how the system gets politicized.
Scale of the Network
As of 2022, SWIFT connected roughly 11,600 institutions across more than 200 countries, sending 11.3 billion messages that year at a daily average of about 44.8 million messages.
This is a substantial rise from an average of 32 million messages per day in 2015 and just 2.4 million per day in 1995.
As of 2018, roughly half of all high-value cross-border payments worldwide ran through the network. Monthly traffic, extrapolated from the daily average, runs well over a billion messages.
The Link to the Dollar System
SWIFT itself is currency-neutral — it carries instructions denominated in any currency. But in practice it is inseparable from dollar dominance: most cross-border trade and finance is dollar-invoiced, and dollar-denominated transactions ultimately clear through the US banking system via correspondent banks with access to the Federal Reserve, a system the US Treasury and the Office of Foreign Assets Control (OFAC) can regulate directly.
SWIFT messaging plus dollar clearing together form the plumbing of the current financial order: the instruction can travel over SWIFT, but if the transaction is dollar-denominated, settlement typically still has to touch a US correspondent bank.
This dual chokepoint — SWIFT for messaging, the Fed-linked dollar clearing system for settlement — is what gives Washington and its allies outsized leverage over global finance.
Weaponization: Iran
2012 disconnection: SWIFT agreed to stop forwarding messages to Iranian banks and individuals blacklisted by the EU, following a pressure campaign led by the EU and the US Congress. SWIFT disconnected the Central Bank of Iran and 15 other banks, and Iranian oil exports fell sharply as a direct consequence.
2018 disconnection: After the United States withdrew from the JCPOA nuclear deal, SWIFT suspended several Iranian banks’ access once the US reimposed sanctions, describing it as a “regrettable” step “taken in the interest of the stability and integrity of the wider global financial system.
” The Central Bank of Iran was among the entities cut off, and this followed an explicit US Treasury warning that sanctions would be imposed on SWIFT itself if it did not comply.
Weaponization: Russia
On 2 March 2022, the EU Council decided to cut seven Russian banks from SWIFT as part of a wider sanctions package, effective 12 March 2022: VTB Bank, Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, and VEB (Vnesheconombank).
Sberbank and Gazprombank were initially spared because they served as the main conduits for Russian oil and gas payments, but that exemption did not last: in June 2022, under the EU’s sixth sanctions package, Sberbank, Rosselkhozbank, and Moscow Credit Bank were also disconnected.
Collateral Pressure: Turkish and Egyptian Banks
SWIFT-and-dollar leverage is not limited to the sanctioned country itself, it also falls on third-country banks that keep doing business with it, since a bank’s access to dollar clearing (not SWIFT membership per se) is what the US actually controls.
Turkey’s state-owned Halkbank is the clearest example: US prosecutors indicted the bank in 2019 over an alleged scheme, running from 2011 to 2016, that moved roughly $20 billion in restricted Iranian funds through gold-for-oil transactions and falsified food-shipment records, and warned the bank could lose access to the US financial system and dollar transactions if convicted.
The case dragged through appeals — including a failed sovereign-immunity defense and a 2024 Second Circuit ruling that the bank must stand trial — before the US Justice Department moved to dismiss it in mid-2026 under a deferred prosecution agreement, a resolution widely read as tied to warming US-Turkey relations rather than a finding of innocence.
Furthermore, the US recently imposed Iran-related sanctions on specific financial entities Golden Global Yatirim Bankasi and two subsidiaries (Golden Global Portfoy and Golden Global Varlik Kiralama).
The US State department has acccused the entities of channeling tens of millions of dollars and providing correspondent banking access for the Islamic Revolutionary Guard Corps (IRGC) Qods Force, specifically transferring oil revenues from China.
Egypt has faced a milder but more recent version of the same pressure. In August 2026, as part of a wider US campaign to tighten the financial noose on Iran, the US Treasury moved to cut off the United Arab Emirates branches of Banque Misr — one of Egypt’s largest state-owned banks — from US dollar clearing over its dealings with Iran, while leaving the bank’s Cairo headquarters and other foreign branches untouched.
Treasury officials framed it as a warning shot rather than a blanket sanction on Egypt, explicitly stopping short of penalizing larger trading partners such as China and India that also do business with Iran — illustrating that enforcement is calibrated by how much economic and diplomatic cost Washington is willing to absorb, not applied uniformly.
Alternatives: Africa’s Payment System and Europe’s INSTEX
Africa’s answer to dollar-and-SWIFT dependency is the Pan-African Payment and Settlement System (PAPSS), launched in January 2022 by Afreximbank alongside the African Union and the African Continental Free Trade Area.
PAPSS lets a trader in one African country pay a trader in another directly in local currency, netting balances centrally rather than routing every transaction offshore through correspondent banks in dollars or euros — a workaround that previously affected more than 80 percent of intra-African cross-border payments.
But the system’s institutional backbone illustrates the very dependency it is trying to escape: Afreximbank is headquartered in Cairo and has historically drawn much of its funding from outside the continent — as recently as 2026 its own leadership acknowledged that European capital markets had long been the bank’s principal funding source, with the share of financing raised directly from Africa still roughly on par with funding from Asia and the Middle East rather than dominant.
That matters because a settlement network built to reduce reliance on foreign capital and foreign-controlled clearing is only as independent as the balance sheet behind it — until African capital markets can fund it at scale on their own terms, PAPSS’s political value as a symbol of financial sovereignty may outpace its practical insulation from external financial pressure.
Europe’s experiment, INSTEX (Instrument in Support of Trade Exchanges), shows how hard it is to build a real SWIFT substitute even with the backing of major economies.
Set up in January 2019 by France, Germany, and the UK — later joined by Belgium, Denmark, Finland, the Netherlands, Norway, Spain, and Sweden — INSTEX was designed to let European firms trade humanitarian goods with Iran without touching SWIFT or the dollar at all, using a barter-style netting mechanism paired with an Iranian counterpart entity rather than direct cross-border payments.
It processed a single real transaction, in March 2020, before Iran itself declined to make further use of it; the ten shareholder governments voted to liquidate INSTEX in March 2023, citing Iran’s persistent non-engagement.
INSTEX’s failure underscores a broader point: an alternative payment channel is only as useful as both counterparties’ willingness to use it, and even a well-funded, state-backed European vehicle could not generate enough transaction volume to justify its own existence.
Why It Matters — and the Pushback
These episodes illustrate SWIFT acting under a mix of legal obligation — EU regulation and US extraterritorial threats aimed directly at SWIFT — and institutional self-preservation, since the cooperative brands itself as a “neutral” utility while complying with whichever jurisdiction can credibly sanction it.
That claim of neutrality is contested: critics argue that SWIFT exclusion functions as a financial weapon that punishes ordinary citizens alongside targeted elites, and that it converts a technical messaging standard into an instrument of geopolitical coercion.
The predictable response has been a push toward alternative infrastructure. China’s Cross-Border Interbank Payment System (CIPS), established in 2015 under the People’s Bank of China, and Russia’s SPFS are the most developed examples, alongside direct bilateral links: Iran and Russia have connected their banking systems so that Iranian banks no longer need SWIFT for transfers with roughly 700 Russian banks and 106 non-Russian banks across 13 countries.
None of these alternatives yet approaches SWIFT’s global reach, but each new round of SWIFT-based sanctions accelerates their development. The long-run risk of weaponizing a nominally neutral utility is that it erodes the very centrality that makes it powerful in the first
Lot Ndamanomhata is from Ekoka. This article reflects his views and is written entirely in his personal capacity.
