You can answer in two ways to Washington’s rather stormy and unpredictable ‘Trumponomics’. (Well, technically, you can answer with loads of subtle variations, but there are two main ideas.)
You can brace for another chapter with no real strategic plan, channelling your ‘inner Buddha’, as the EU plans to do.
Or you can prepare the way China did.
While Western capitals tie themselves in knots over Washington’s unpredictability, and brag about defence strategies and alike, Beijing proved that it has been preparing for something far more consequential: independence.
Even if it would find itself completely out in the cold (pretty much like Moscow did) in the likely case of a full-blown financial confrontation with the United States, China is ready.
In the world where headlines were dominated by NATO spending, crucial elections and trade war, China has spent the past decade quietly building a financial lifeline, an alternative to the SWIFT system.
Beyond the noble goal of ‘providing alternative financial mechanisms for the rest of the world’, the system was designed with the main focus in sight: to insulate China’s economy from U.S.-led sanctions.
This lifeline bears the name of Cross-Border Interbank Payment System, or CIPS, and it might be the most important piece of infrastructure you’ve never heard of. A more than ten-years-old project in the making that has had an annual 30 percent growth rate since the war in Ukraine started.
SWIFT (the acronym for Society for Worldwide Interbank Financial Telecommunication) is a Belgium-based company with data centres linked to the U.S. The backbone of global finance, processing trillions of dollars in cross-border payments every day.
Only, it proved to be not only a neutral tool, but also a geopolitical weapon.
In 2022, the U.S. and the EU used it to cut off major Russian banks following the invasion of Ukraine, crippling Moscow’s ability to conduct global transactions.
Moscow tried to build its own version of SWIFT, but its own System for Transfer of Financial Messages (SPFS) proved inadequate with limited global reach and high costs.
But the shockwaves its expulsion from the global circulatory system echoed nowhere louder than in Beijing – giving a strong push to their own system. The message was clear: SWIFT could be turned off like a light switch. An unacceptable vulnerability for an economy worth of $18 trillion, heavily reliant on global trade.
Transaction volume in CIPS reached $19 trillion in 2024, up from just $7.8 trillion in 2021, thanks to China’s three-pillared geopolitical masterstroke.
The first pillar was global expansion.
To mix business with pleasure, Beijing made CIPS a linchpin for its Belt and Road Initiative (BRI) projects, enabling yuan settlements for infrastructure deals in Asia, Africa and Latin America. It also allowed sanctioned Russian banks like VTB and Sberbank to pivot to CIPS. This way, by 2024, over 75 percent of Sino-Russian trade was settled in RMB.
Digital Yuan Synergy became the second pillar – a genius strategic idea.
China began integrating its central bank digital currency (e-CNY) with CIPS, allowing near-instantaneous cross-border settlements. Trials with Thailand and the UAE showcased blockchain-powered transactions that bypassed SWIFT entirely.
And, as a final step, Beijing enhanced its Strategic Partnerships.
A great emphasis was (is) on ASEAN. As trade between China and ASEAN nations grew 85-fold since the 1990s, CIPS became the default system for regional yuan transactions. But China’s Middle Eastern Allies (like Saudi Arabia or Iran) have also explored CIPS for oil trade, reducing their dollar dependency. Though NATO members still avoid CIPS (in a great extent thanks to American pressure), China forged a coalition of the economically disaffected.
All in all, the Chinese CIPS is no longer a mere SWIFT alternative.
It slowly grew into a parallel financial ecosystem.
By 2024, CIPS was processing $19 trillion annually, with 1,631 financial institutions in 112 countries plugged into the system – basically bypassing the dollar and the West.
Naturally, it would be too early to toll the bells for SWIFT, as CIPS is a far cry away from replacing it, just like the yuan is not taking the dollar’s place as the global go-to currency. But it became a tool for resilience, Beijing’s own financial bunker.
Something that should (could) be an example globally – while Europe is bogged down in trying to figure out Trump and the new world order (that right now shows more resemblance to political quicksand), China understood the importance of financial sovereignty, as well, not just that of tanks and trade.
As the tensions with the U.S. slowly come to a boil, CIPS stands as both a shield and a spear. Even if Washington would decide to weaponize SWIFT against Beijing, CIPS would allow it to keep its economic engine running.
The conflict in Ukraine didn’t only reshape Europe’s security landscape – it started some serious thinking about decoupling from the unpredictable Washington, or at least reassessing some former taboos. One of such could be accessing CIPS.
