Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

A quick breakdown of what SWIFT is and why it matters

twitter.com

Post reply on HN
Print view View original

301–310 of 496 posts

Re: A quick breakdown of what SWIFT is and why it matters

#301

Post by lxgr »

periheli0n wrote: post #284
sealthedeal wrote: post #257

CEO and co-founder of Routefusion here, a cross-border bank to bank payment API. We use the SWIFT network regularly. I can 100% confirm that all money in the world is just literally numbers, and it is balanced by the different federal reserve systems around the world to ensure no one can "create" money without notifying everyone. I guess if I was super cool I would do an AMA because this is the only thread that is re…

What would keep some entity that has its SWIFT access revoked from switching to China's CIPS or even crypto? Would it be merely an inconvenience, requiring the change of a few processes, or would it create hard problems?

When people say "revoking somebody's SWIFT access", I think they really mean putting them on national or international sanction/embargo lists that prohibit them from doing any kind of business with them (in particular, sending payments in their name or for their benefit), rather than actually, technically removing their SWIFT network access.

Since SWIFT is not the only, but certainly the largest financial/interbank messaging network, I suppose the effects are similar, but "disabling SWIFT" to me always sounds like an implementation detail.

Re: A quick breakdown of what SWIFT is and why it matters

#302

Post by elliekelly »

gruez wrote: post #7

>Russia has also been building an in-house system since 2014—the last time SWIFT cutoff was threatened—which may mean they are able to temper some of the impact a cutoff would have on its economy. If they're building a replacement, doesn't that also mean we should use "cut off SWIFT" now, rather than later when it'll be ineffective?

SWIFT is kind of like Facebook. It has the benefit of “everyone” already using it. So even if you make your own Facebook it won’t have the same functionality as Facebook and it’s very unlikely everyone from Facebook will be motivated enough to make an account on your platform, too.

Re: A quick breakdown of what SWIFT is and why it matters

#303

Post by lxgr »

rocgf wrote: post #275
sealthedeal wrote: post #257

CEO and co-founder of Routefusion here, a cross-border bank to bank payment API. We use the SWIFT network regularly. I can 100% confirm that all money in the world is just literally numbers, and it is balanced by the different federal reserve systems around the world to ensure no one can "create" money without notifying everyone. I guess if I was super cool I would do an AMA because this is the only thread that is re…

Well, since you semi-offered... :) Could you explain this to me like I am a complete moron? I understand that SWIFT allows for international payments, but I don't understand exactly how it differs from a normal bank account transfer within the same country.

When people say SWIFT, they usually mean "international payments via correspondent banking". SWIFT is just a messaging layer to enable that.

Look into correspondent banking if you're curious how all of that works – SWIFT is just one (very popular) way correspondent banks can communicate with each other and/or look up paths to facilitate international payments for their account holders.

Re: A quick breakdown of what SWIFT is and why it matters

#304

Post by MandieD »

morelisp wrote: post #169
I_am_tiberius wrote: post #162

If you are pro SWIFT exclusion of Russia, please like this tweet (or a similar one). https://twitter.com/IchBin_RO/status/1497274721418760193

What good will liking a tweet do? If you are pro-SWIFT-exclusion-of-Russia and live in Germany please contact your national representatives and let them know you're willing to bear some hardship so others don't have to.

#PullisGegenPutin (sweaters against Putin) - turn the thermostat down to 18 C (64 F) and throw on a sweater.

Then call and email your feckless MdB.

Re: A quick breakdown of what SWIFT is and why it matters

#305

Post by lxgr »

_448 wrote: post #287
sealthedeal wrote: post #257

CEO and co-founder of Routefusion here, a cross-border bank to bank payment API. We use the SWIFT network regularly. I can 100% confirm that all money in the world is just literally numbers, and it is balanced by the different federal reserve systems around the world to ensure no one can "create" money without notifying everyone. I guess if I was super cool I would do an AMA because this is the only thread that is re…

How does one connect to the SWIFT network? Say, someone wants to start a company for providing some financial service like fund transfer across borders, then connecting to SWIFT will be very helpful. I was always fascinated by how all this works and what does it take to directly use the SWIFT network. Any insights on this will be really helpful.

> How does one connect to the SWIFT network?

You generally need to be a bank or regulated financial institution.

SWIFT is just a messaging layer for correspondent banking. If you're not a bank, SWIFT access is about as useful as suddenly learning your country's president's cell phone number: Definitely cool, but the two of you would probably not have much to talk about.

Re: A quick breakdown of what SWIFT is and why it matters

#306

Post by VBprogrammer »

_448 wrote: post #287
sealthedeal wrote: post #257

CEO and co-founder of Routefusion here, a cross-border bank to bank payment API. We use the SWIFT network regularly. I can 100% confirm that all money in the world is just literally numbers, and it is balanced by the different federal reserve systems around the world to ensure no one can "create" money without notifying everyone. I guess if I was super cool I would do an AMA because this is the only thread that is re…

How does one connect to the SWIFT network? Say, someone wants to start a company for providing some financial service like fund transfer across borders, then connecting to SWIFT will be very helpful. I was always fascinated by how all this works and what does it take to directly use the SWIFT network. Any insights on this will be really helpful.

I used SWIFT messages as part of my first real job (finance rather than tech). The format itself is comically loose, ill defined and fugly by any reasonable measure.

When something really screwed up you resorted to sending MT599 messages around, free format text messages.

I believe it's all SWIFT over IP this century so probably not dissimilar to any other API you might use.

Re: A quick breakdown of what SWIFT is and why it matters

#307

Post by jaxrtech »

TekMol wrote: post #26

I often wonder how money is stored. It can't be just a number on a computer in a bank, right? Otherwise some Russian bank could just increase that number to whatever they like. And say "Look, we own 100 Trillion USD. Now let's go shopping.". So I guess USD needs to be recognized by the US somehow? Could the US simply "void" all USD that are owned by Russia?

Well, it's a number in a ledger system somewhere (e.g. mainframe system, Oracle database, or what have you), with a lot of auditing, reporting, and procedures around changing that number. (Though, having an internal API to instantly get a new bank account number always seemed kinda funny to me).

Slightly related, I'd have to find it again, but I recall there was at some point an assembly level hack on some Oracle database holding core banking in one country.

Re: A quick breakdown of what SWIFT is and why it matters

#308

Post by morelisp »

sealthedeal wrote: post #260

If we "cut" off SWIFT it would hurt Europe and the States just as much as it would Russia because this is how all money moves. Think paying for natural gas, oil, commodities, etc etc.

That's... that's the point. We should not be paying them for gas. We should not be funding their war.

Re: A quick breakdown of what SWIFT is and why it matters

#310

Post by JumpCrisscross »

JacobThreeThree wrote: post #277
sealthedeal wrote: post #257

CEO and co-founder of Routefusion here, a cross-border bank to bank payment API. We use the SWIFT network regularly. I can 100% confirm that all money in the world is just literally numbers, and it is balanced by the different federal reserve systems around the world to ensure no one can "create" money without notifying everyone. I guess if I was super cool I would do an AMA because this is the only thread that is re…

>I can 100% confirm that all money in the world is just literally numbers, and it is balanced by the different federal reserve systems around the world to ensure no one can "create" money without notifying everyone. How does the system guarantee that nobody's creating money without notifying everyone? Furthermore, does the system guarantee that the central banks of each country are correctly adjusting their books in…

> How does the system guarantee that nobody's creating money without notifying everyone?

Simple answer is balanced books. Longer answer is public reporting and reconciliation.

If a bank shows its Federal Reserve balance at X on its asset side and the Federal Reserve shows its bank balance at 0.9X on its liability side, that will raise issue on reconciliation. The system lazily evaluates, however, which makes it nimble but also corruptible--if that bank never tries to spend that money, it may not come to light until audit.

Post reply on HN