As a result of a long and tedious sanctions play, the US has discovered that codes to the new nuclear red button aren’t stored in a briefcase anymore but, rather, the tiny Belgian village of La Hulpe, in the hands of Yawar Shah. Ironically, Shah is the name of the chairman of The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a financial information service that provides international transfers.

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SWIFT is subjected to Belgian and European laws, but its board includes executives of US banks, allowing them to effectively regulate over 11,000 financial institutions in more than 200 countries and territories. The power of fast and furious financial sanctions opened up the whole new world of possibilities for the US to command and steer the world via shepherding the world’s high-value financial transactions.

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Meanwhile the EU, tethered by the US reaping a massive intelligence from SWIFT and capitalizing on it while violating European privacy protection laws and imposing unilateral sanctions on its trade partners, rebels with its own SWIFT replica. German and French finance ministers have jointly announced in August 2018 plans to develop such a platform to specifically provide services to heavily sanctioned Iran and Russia.

 

Other easy to use, much older alternative remittance and underground banking systems include “hawala,” “hundi,” “fei ch ‘ien,” “chit system,” “poey kuan” and the black-market peso exchange. All feature efficiency, anonymity, lack of a paper trail and are immensely attractive for the transfer of both legitimate and illicit funds.

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An option of bulldozing some of such services may still be viable by the demand of shutting down, say, Russian SPFS, under the threat of cutting the country’s banks from SWIFT, or, at least, could be utilized as a negotiating leverage. It may not exist in the future war of financial services where globalization rapidly strengthens recent outsiders and the US’s overregulation might set us up for fundamentally losing it, just like the many trade wars we have already lost.

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We are quite far from such a prospect as of now, as all those services are a baby steps on a scale of current SWIFT supremacy, but let’s not forget the story of the young Russian Sergey Brin pitching to Yahoo! his search engine in 1998, the arrogant rejection and Google turning a money-printing machine and a verb by 2002.

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Alternatively, could there be an option to work with those financial platforms, instead of ignoring them? At least for the sake of retaining the priceless intel? Such a possibility seems too remote for the one-dimensional regulatory thinking, but may appeal to strategic political minds.

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Financial monitoring and control should become the cutting edge of US policies and a strategic matter of national security as a means of retaining ultimate world dominance. However, the inherited conservatism of the financial sector and of governmental regulation may result in an anachronism, lagging behind in terminal failure to adjust to dangers of fast-pacing development in the most demanding industry sector, compromising the entire leadership of Western democracies.