The geopolitics of SIBOS in Beijing
The following are the issues I detected at Sibos 2024, the annual meeting of Swift, the world’s largest bank-to-bank payment messaging system, which was held for the first time in China last week.
1. This was the first time that China volunteered to host SIBOS, through the Bank of China, but when the meeting actually arrived in Beijing, the Chinese government downgraded its keynote speaker from the governor of the central bank to the deputy governor at short notice.
2. It was a busy week for geopolitics. The BRICS Summit was held in Moscow in the same week and the BRICS member states, which includes China, discussed BRICSPay as an alternative payment system which stole the thunder in the local newspapers, totally oblivious to the foreign delegates at SIBOS.
3. It appears as if that the Bank for International Settlements – BIS is heading for a collision course as it was widely reported that it was involved in the BRICS payment initiatives.
The BIS later wrote to me to clarify that Agustin Carstens, its general manager, had since made the categorical statement in DC that “we cannot directly support any project for the BRICS because we cannot operate with countries that are subject to sanctions”. Also, there was nothing in the Kazan Declaration suggesting that BRICS was actually working with the BIS.
But the organisers of this year’s BRICS Summit clearly intended the confusion. The Chinese media was openly suggesting that the mBridge project originally pioneered by the Hong Kong Monetary Authority (HKMA) could be repurposed for BRICS, which includes Russia. These fungible relationships makes all BIS cross-border pilots suspect to the Americans.
The worst session at the conference was the one where the BIS, the Financial Stability Board (FSB) and SWIFT were congratulating themselves generously without discussing these clouds of controversies forming over their heads.
4. The difficulties that the Global South is facing with an onerous, expensive and punitive U.S. defined global payment system is now reaching epidemic proportions. It is setting the stage for these countries to consider the alternatives, even those by repressive regimes. But SIBOS is really a western-dominated talk-shop that ignores their real concerns.
5. It is unlikely that SIBOS will be invited again to China. It is also unlikely that SWIFT would want to hold SIBOS in China. Many global and U.S. banks, consulting firms and technology companies did not allow their employees to carry laptops and mobile phones to China. Attendance from the U.S. was clearly lower than normal. It’s too difficult for now.
Watch my full discussion in the video below.
PS: This post was updated after clarifications from the BIS.
