Recently, some netizens discovered a contradiction: Iran has long been kicked out of the SWIFT system dominated by the United States, and Iran's foreign ** payment is completely out of the SWIFT system. But why can the U.S. still freeze Iran's assets at any time?In order to understand this problem, we first need to distinguish the difference between the SWIFT system and the CHIPS system. The SWIFT system is the transmission of cross-border transaction information, while the CHIPS system is the final clearing system of funds. Next, we will delve into the role and operation mechanism of these two systems, and analyze the reasons why Iran's $6 billion funds were frozen by the United States.
The SWIFT system is an international fund communication system managed by the Society for Worldwide Interbank Financial Telecommunication, which is mainly responsible for the transmission of cross-border transaction information, and does not involve the settlement module of funds. In other words, the SWIFT system is only one of the infrastructures for international payment information, not the final settlement system. After Iran was kicked out of the SWIFT system, it is completely possible to use other payment systems to complete the transmission of cross-border transaction information, so as to achieve the final settlement of foreign funds.
However, regardless of the currency, the final clearing system is in the hands of the issuing unit of each currency. In the case of the renminbi, for example, the final clearing system is in the hands of the People's Bank of China;The final liquidation system for the dollar is in the hands of the Fed. If the international flow of dollars does not go through the chip system of the United States for final settlement, it is equivalent to the banks of other countries have the right to issue dollars, which will cause great chaos to the global economic order.
The chips system is the final liquidation system of the US dollar, which plays a role in the unification.
1. The role of stable and safe dollar settlement. Regardless of the flow of dollars in the accounts of banks and businesses in other countries and regions, they must eventually be cleared through the chips system. Banks in other countries cannot print their own dollars, and the amount of dollars in their accounts must flow directly or indirectly from the United States. Therefore, they cannot create new dollars out of thin air, like the Fed does, and cannot add additional dollars to the account.
At the end of the day, Iranian banks don't have the right to issue dollars, they can only record the inflow and outflow of dollars, and they can't add dollars to an account out of thin air. If the United States suddenly closes the channels of capital circulation and makes the amount of dollars in the international market constant, then the decrease in the amount of dollars in account A will inevitably be equal to the amount of dollars in account B. No country's banks can replace the Federal Reserve in issuing dollars out of thin air and allocating funds to desired corporate accounts.
Therefore, when the United States freezes Iranian funds, banks in other countries cannot complete the information transfer of dollar funds between banks, and therefore cannot complete payments, transactions, and settlements. This has rendered the $6 billion in Iranian assets worthless and unusable on the international market.
In order to avoid the dilemma that the US dollar held in the hands cannot be used in the international market when the United States is severely sanctioned, countries have promoted local currency settlement, hoping to expand the use of their local currencies in the world. The final clearing system of the local currency is in the hands of the country's central bank, so that the stable and safe use of the country's currency can be guaranteed. By figuring out the difference between the SWIFT and CHIPS systems and the importance of the final liquidation system, we can better understand why the United States was able to freeze Iranian assets.
In the global economy, financial cooperation and financial flows between countries play an important role. For some countries sanctioned by the international community, the problem of capital flow is particularly prominent. Iran, as a country under sanctions, is still difficult to get rid of the restrictions and freezes of the United States, although it has been kicked out of the SWIFT system. This situation not only has a serious impact on Iran's economy, but also poses a challenge to the international financial order.
As regular readers, we should have some understanding of this issue. Financial cooperation is an important support for the development of the international community, and only through consultation and cooperation can we find ways to balance the interests of all countries in order to promote the prosperity and stability of the global economy. Therefore, we hope that all countries can build a more just and harmonious financial system, avoid similar constraints and conflicts, and achieve common development and win-win results for all countries.