Weaponized Interdependence

[Joe Leote]

The talk begins with weaponization of SWIFT messaging platform as a chokepoint for international payments:

Henry Farrell and Abe Newman on Weaponized Interdependence

To my knowledge the US controls Fedwire and CHIPS to clear international payments in US dollar funds. The CHIPS network gives the US leverage over SWIFT. China established the CIPS payment system to clear international payments in RMB funds. SWIFT is not a payment clearing system, it is secure messaging used for payment instructions.

Joe

[Joe Leote]

This video claims China's international trade with the Global South is accelerating, encounters payment problems, and typically clears via Stablecoin and Hong Kong (crypto is banned inside China):

What China Taught Me About Global Trade

The type of stablecoin is not specified.

Stablecoins for Cross-Border Payments: A Guide | Stripe

Based on informal research: If export factories in China make payroll with local currency then conversion has to occur via FX markets and/or domestic banks even though international trade can clear directly in stablecoin without FX, SWIFT, or domestic bank clearing services.

Joe

[William Meyer]

With iran using bitcoin for oil payments in the news lately, I wonder if that influenced the clarity act vote?  Hard for bessent to be trumping iran sanctions policy while the rest of the admin touts support for bitcoin and crypto.

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