Alternatives to SWIFT: Emerging Global Payment Systems

26 Sep 2026

Tags: International Relations   Groupings   Regional Agreements

Source: The Hindu

Context: The recent BRICS New Delhi Declaration emphasised increasing trade and settlements in national currencies, reflecting the broader push towards reducing dependence on traditional dollar-based payment channels.

• Multiple conflicts and the use of financial sanctions by the U.S. have encouraged several Global South countries to explore alternatives to the Belgium-based SWIFT system.
• A proposal to link Central Bank Digital Currencies (CBDCs) for cross-border payments among BRICS countries was reportedly considered before the summit, but it was not included in the final Declaration.
• The search for alternatives remains uneven because of limited global CBDC adoption, technological challenges, differences in national payment systems and geopolitical considerations.

SWIFT: The Existing Global Payment-Messaging Network

• SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a Belgium-based international financial messaging network that enables banks and financial institutions to securely exchange standardised payment instructions.
• SWIFT does not itself transfer or settle money; it facilitates communication between financial institutions, while actual settlement occurs through banks and payment systems.
• Its widespread global adoption gives it significant importance in cross-border financial transactions.

Major Alternatives to SWIFT

1. CIPS – China

• Cross-Border Interbank Payment System (CIPS) was launched by China in 2015 under the backing of the People's Bank of China (PBoC) to promote international use of the renminbi (yuan).
• It allows participating banks to clear and settle cross-border yuan transactions directly through China's onshore system rather than relying entirely on offshore yuan-clearing centres.
• CIPS has expanded internationally and now has participants across more than 120 countries, including most BRICS members, though India is an exception among BRICS members according to the article.
• In 2025, CIPS reportedly processed an average of about 679.8 billion yuan per day.
• Despite its expansion, CIPS remains considerably smaller than established international payment systems and China is seeking to develop it further for multi-currency settlements and integration with other foreign-payment channels.

2. SPFS – Russia

• System for Transfer of Financial Messages (SPFS) was developed by Russia in 2014 as an alternative financial-messaging system capable of operating outside Western-controlled infrastructure.
• Its importance increased after several Russian banks were excluded from SWIFT in 2022 following Russia's invasion of Ukraine and the resulting Western sanctions.
• The system expanded rapidly as Russia sought to maintain international financial connectivity despite sanctions.
• In 2023, 50 new entities joined SPFS, taking its total membership to around 440, including more than 100 non-resident entities, according to the Russian central bank.
• Iran has also connected its domestic interbank telecommunications system, SEPAM, with SPFS; according to Iranian central-bank data cited in the article, 52 Iranian bank branches and four foreign banks were connected with 106 banks through the arrangement.

3. Project mBridge – Multi-CBDC Platform

• Project mBridge is a cross-border payment initiative involving the central banks/monetary authorities of China, Hong Kong, Thailand, the UAE and Saudi Arabia.
• It seeks to enable direct peer-to-peer cross-border settlement using CBDCs, potentially reducing reliance on correspondent banks.
• The project developed the mBridge Ledger, a purpose-built blockchain designed for multi-currency CBDC transactions.
• mBridge achieved Minimum Viable Product (MVP) status in 2024, indicating that its underlying platform had reached a stage suitable for further practical development.
• The Bank for International Settlements (BIS), which had supported the project since 2019, exited the project on 31 October 2024.
• Media reports subsequently linked the BIS's exit to concerns about mBridge potentially facilitating payment arrangements outside Western sanctions networks; such interpretations remain reported explanations rather than an officially established reason.

How Effective Are These Alternatives?

• CIPS has achieved the greatest international scale among the systems discussed, supported by China's large trade network and the increasing international use of the renminbi.
• The renminbi's inclusion in the IMF's Special Drawing Rights (SDR) basket has contributed to its international acceptance and indirectly strengthened the environment for CIPS adoption.
• SPFS has demonstrated practical utility for Russia under sanctions, but its international reach remains much smaller than that of established global financial infrastructure.
• mBridge represents a technologically different approach by using CBDCs and distributed-ledger technology, but wider adoption depends on CBDC uptake, interoperability, regulatory coordination and trust among participating countries.
• None of these systems has yet displaced SWIFT as a globally dominant financial-messaging network.

India–Russia Trade Settlement Mechanism

• India and Russia have developed a functioning bilateral payments mechanism using rupees and roubles, particularly important because Russia is a major supplier of crude oil to India.
• According to Sberbank's India head, rupees and roubles account for around 96% of bilateral trade settlements.
• Official data cited in the article indicates that 22 Russian banks and 17 Indian banks currently facilitate bilateral trade payments.
• Sberbank, Russia's largest lender, was tasked with developing the payment infrastructure supporting this bilateral mechanism.
• The India–Russia arrangement demonstrates that countries can create bilateral payment channels without completely replacing the wider global payment infrastructure.

CBDCs and Cross-Border Payments

• A Central Bank Digital Currency (CBDC) is a digital form of sovereign currency issued and backed by a country's central bank.
• Linking CBDCs could enable direct cross-border settlement, potentially reducing the number of intermediaries and transaction time.
• However, widespread implementation requires interoperability between different national CBDC platforms, common regulatory standards, cybersecurity safeguards and adequate adoption.
• The BRICS proposal illustrates the potential direction of future payment systems, but the limited adoption of CBDCs globally remains a major constraint.

SWIFT vs Emerging Alternatives: Key Distinction

• SWIFT: Primarily a global financial messaging network.
• CIPS: Chinese cross-border payment, clearing and settlement infrastructure, centred initially on the renminbi.
• SPFS: Russian financial messaging system, developed primarily as a sanctions-resilience mechanism.
• mBridge:Multi-CBDC cross-border settlement platform designed to facilitate direct digital-currency transactions.