In the world of finance, one institution reigns supreme, yet it remains largely unknown to the public. This institution processes over $400 billion every day, surpassing the annual GDP of countries like Iran, Denmark, and South Africa. With a network that links over 11,000 banks and financial entities in more than 200 countries, including global central banks such as the U.S. Federal Reserve, it plays a pivotal role in the global financial system. This institution is the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the backbone of worldwide finance.

SWIFT impacts us all, whether we realize it or not. If you’ve ever sent a wire transfer, it likely flowed through the SWIFT network. Even if you haven’t directly engaged in this process, your bank relies on SWIFT for managing payments on the backend.

The reason for shedding light on SWIFT is its recent announcement about successfully piloting central bank digital currency (CBDC) transactions. This development signals the financial establishment’s preparation for the rollout of CBDCs, which are digital versions of traditional fiat currency issued by central banks using blockchain technology.

According to the Atlantic Council, 130 countries, including economic powerhouses like the United States, Canada, and China, are working on or adopting CBDCs. This accounts for 98% of the global economy. For those who cherish financial privacy, understanding the implications of SWIFT’s role in this transition is crucial.

If SWIFT’s plans materialize, your ability to safeguard your wealth may be severely compromised. U.S. authorities, along with unelected foreign officials, could potentially access your most private financial transactions, as they have done since the aftermath of the 9/11 attacks 22 years ago.

In this article, we’ll explore how SWIFT’s adoption of blockchain technology can impact your financial privacy. We’ll also discuss the potential threats to your financial freedom posed by CBDCs and how to protect your wealth from government overreach.

SWIFT’s Transition to Blockchain

SWIFT has been an integral part of the global financial network since its inception in 1977. Despite the advancements in technology over the past 46 years, the process it employs remains nearly unchanged, often resulting in high costs and extended wire transfer processing times.

To adapt to the modern era, SWIFT must embrace blockchain technology. A recent trial using Chainlink’s Cross-Chain Interoperability Protocol for real-time settlement, available 24/7, demonstrated SWIFT’s potential to provide seamless connectivity in a CBDC-based financial system. This breakthrough could eliminate the days-long wait for wire transfers to clear, significantly enhancing transaction efficiency.

Blockchain technology’s ability to process transactions rapidly and at a fraction of the cost is well-known, with networks like Polygon capable of handling up to 65,000 transactions per second, each costing mere pennies. SWIFT acknowledges this potential, as it seeks to incorporate CBDCs to retain control over global financial markets.

However, as we’ll discuss later, a centralized network like SWIFT poses serious threats to financial privacy.

The Threat to Financial Privacy

SWIFT serves as the epicenter of the global financial network, acting as the gatekeeper for international transactions. Governments have long recognized its strategic significance and have utilized it to their advantage. Over the years, sanctions have become a potent tool in Western foreign policy, resulting in a surge in the imposition of sanctions on various countries.

Following the 9/11 attacks, SWIFT began collaborating with the U.S. government to combat terrorism by sharing financial transaction information. In 2012, when the U.S. imposed sanctions on Iran, SWIFT disconnected Iranian financial institutions from its network, marking the first instance of such action. This move severely impacted Iran’s oil exports, leading to a significant reduction.

In 2022, amid Russia’s invasion of Ukraine, Western powers demanded SWIFT to disconnect Russian banks from its network, resulting in approximately $1.1 trillion of Russian assets being frozen worldwide.

The concerning aspect here is that if SWIFT can cut off entire countries, it raises questions about the power it wields over individuals. We’ve seen instances where governments have frozen the bank accounts of citizens for actions they disagreed with, even without CBDCs.

In February 2022, during the trucker protests at the U.S.-Canada border, the Canadian government tracked down and froze the bank accounts of hundreds of supporters who donated small sums to the protesters. Such actions indicate that governments already have the means to exert control over individual finances.

With the advent of CBDCs, governments may introduce even stricter controls, limiting your financial privacy and freedom. Therefore, it’s imperative for all individuals, regardless of their political stance, to prepare for the potential transition to a digital dollar and its implications for personal financial autonomy.

Protecting Your Financial Freedom

To safeguard your financial freedom, you have two main options: Bitcoin and physical gold.

Bitcoin, a decentralized digital payment system, offers a stark contrast to centralized digital currencies. When you self-custody your bitcoin, no entity can seize it, and you can transact without needing permission, free from counter-party risks. Additionally, bitcoin’s deflationary nature prevents inflation through excessive money printing, ensuring your financial security.

Physical gold serves as an analog backup to bitcoin, offering an asset outside the traditional currency system. It serves as a long-term hedge against potential devaluation of CBDCs over time.

Even a modest allocation to both bitcoin and physical gold can provide a level of financial privacy and protect your wealth from potential governmental overreach. To learn more about safeguarding your financial freedom and potentially profiting from the rise of CBDCs, consider exploring the playbook recently put together by Teeka Tiwari.

As the foundation for an international CBDC framework is already laid, the era of CBDC dominance in global transactions is approaching. Now is the time to prepare and secure your financial independence before the digital dollar regime becomes a reality.

By Impact Lab