U.S. Dollar Dominates SWIFT as BRICS Pushes for Alternatives

As of August 2024, the U.S. dollar dominated global payments on the SWIFT network, accounting for nearly half (49.1%) of all transactions, reports PaySpace Magazine. No other currency currently rivals the dollar's influence in international payments. Research from Statista shows that most SWIFT transactions are processed in U.S. dollars, with the euro—the second-most used currency—registering only half as many transactions.

The research was released ahead of the expanded BRICS summit, where Russia, facing heavy sanctions, advocated for an alternative payment platform to curb the U.S. dollar's dominance in global trade and financial transactions. As of August 2024, the U.S. dollar is the primary currency for international payments, comprising over 49% of SWIFT transactions. When excluding intra-Eurozone payments, the dollar’s share on SWIFT jumps to 60%. The euro holds second place with 21.6%, while the British pound and Chinese yuan account for 6.5% and 4.7%, respectively.

BRICS countries, collectively representing around 45% of the world’s population, are aiming to reduce reliance on the U.S. dollar. They propose a network linking commercial banks across BRICS nations to enable cross-border transactions in local currencies via tokens, lowering the dependence on the dollar and cutting the costs of international transactions.

Russia, leading the charge for this initiative, seeks an alternative not only to the U.S. dollar but also to SWIFT, which it views as a "Western" payment system. In response to sanctions, Russia established the SPFS payment system in 2014, which now includes over 550 institutions across more than 25 countries as a SWIFT substitute.

China’s CIPS (China International Payment System) also serves as an alternative, linking nearly 1,500 banks across 113 countries and regions. In 2023, it processed over 123,000 trillion yuan (approximately $17,200 trillion USD).

Despite these alternatives, SWIFT remains the dominant network with annual transaction volumes of about $150,000 trillion, connecting over 11,000 financial institutions across more than 200 countries. To retain its leading position amidst rising competition, SWIFT is continuously innovating. Its latest initiatives include AI-driven fraud detection, a platform for connecting multiple central bank digital currencies (CBDC), and a blockchain-based pilot for corporate actions.