• Some Russian banks have been banned from SWIFT, a cross-border messaging service for banks.
• India was reportedly considering a Russian proposal to use the SPFS for payments in rubles.
• Moscow is also working with Beijing to connect to the Chinese messaging system.

In the aftermath of Russia’s unprovoked invasion of Ukraine, some Russian banks were banned from SWIFT, the Belgium-based messaging service that lets banks around the world communicate about cross-border transactions. The ban has hampered cross-border transactions for Russia’s trade and financial systems, isolating the country economically.

Now, both Russia and China are looking to establish alternatives to the US dollar hegemony.

Russia is touting an alternative ruble-based payment system called the System for Transfer of Financial Messages (SPFS). The system was set up in 2014. In late April, the country’s central bank said it would start keeping the names of participants secret.

China’s Cross-Border Interbank Payment System (CIPS) — which processes payments in Chinese yuan — also has potential to replace SWIFT. The system has an expansive network of 1,280 financial institutions, said Peter Keenan, the cofounder and CEO of Apexx, a payments provider that used to work with Russia’s domestic Mir payment card. That’s compared to SPFS’ much smaller network of 400 users.

There are few alternatives to SWIFT, Keenan told Insider: “This is one of the reasons why Russia is looking to CIPS and an alternative for Asian payments specifically.”

Here’s how China and Russia’s SWIFT alternatives could cause disruptions in the global payments system and the dollar’s dominance.

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