US Treasury Secretary Steven Mnuchin recently threatened SWIFT, the global financial messaging service, with penalties if it does not comply with new US sanctions and cut off entities doing business with Iran, which has created a demand for alternatives to SWIFT.
The Belgium-based institution, SWIFT (Society for Worldwide Interbank Financial Telecommunication), supports over 11,000 financial institutions in over 200 countries and territories with messaging services to facilitate interbank transfers. The action would inhibit Iranian businesses from receiving funds for its exports and paying for imports. This occurred previously in 2012 when the US and EU pressured SWIFT to “cut financial transactions with at least 30 of Iran’s financial institutions, including the central bank”. The financial blockade was lifted in 2016 with the Iranian nuclear deal, but that has since fallen apart under the current US presidential administration.
The recent developments have forced many leaders in Europe to push for an alternative to SWIFT, including German Foreign Minister Heiko Maas and EU Foreign Affairs Chief Federica Mogherini. Russia has already built an alternative, System for Transfer of Financial Messages (SPFS), that now handles the financial transfer data for more than half of Russian’s institutions, according to an RT report. The SPFS was built in the wake of sanctions from the US and Europe for the Crimea issue. Both issues signal a demand for solutions to the monopoly that is SWIFT.
Cryptocurrencies provide censorship resistance and independence
Discussion of international sanctions and economic blockades often leaves out the fact that the penalties will harm thousands of businesses and millions of individuals directly and indirectly. The creation of alternatives to SWIFT mitigates risks for businesses and individuals so they do not have to suffer lower economic well-being for the actions and opinions of government leaders. This trend of searching for alternatives is further exemplified by China’s creation of the Asia Infrastructure Investment Bank to counter the lending power of the World Bank, International Monetary Fund, and Asian Development Bank. Then the BRICS also pursued a similar strategy to break international monopoly power of the G8 by attempting to form more intimate and cooperative relations between Brazil, Russia, India, China, and South Africa. Nevertheless, this diffusion of power can only go so far since these institutions simply turn a monopoly into a duopoly or an oligopoly into a slightly larger oligopoly.
Cryptocurrencies, however, can diffuse power right down to the individual since anyone can be their own bank by opening their own wallet and make transfers to anywhere in the world for a tiny fraction of what it costs through SWIFT and competitors. Additionally, cryptocurrencies are increasingly difficult to shut down since nodes operate all over the world and if a chain ever does become compromised by a monopoly, users can easily fork the chain or move their funds over to another coin in minutes for a tiny amount of money. This protects individuals and businesses from the domestic and international actions of their government as well as outside influence. Cryptocurrencies grant more rights to the individual and separates them from the actions of state leaders.
Dash endeavors to enable everyday censorship resistance
To enable the benefits of censorship resistance and independence of cryptocurrencies, consumers have to use cryptocurrencies as much as possible in everyday life and not use fiat or digital fiat. Other cryptocurrencies have demonstrated issues with everyday operations, whether it is long confirmation times, high transaction costs, or uncertain chain future. Dash, on the other hand, has remained consistent with record low transaction costs, extremely fast confirmation times, great security, and a promising future of chain continuity and additional features. Additionally, Dash offers consumers and merchants optional privacy through PrivateSend, which can become very important for individuals and merchants that are located within countries where they have to worry about being a political target for defying sanctions and/or bad government policy. The combination of these features enables Dash to be a top-tier alternative financial payment service for individuals and merchants that need to mitigate risks created by having a monopoly or oligopoly of international payment facilitators.