Title Title
Are US demands on SWIFT about Iran or digital supremacy? Are US demands on SWIFT about Iran or digital supremacy?
Summary Summary
The United States has insisted SWIFT stop financial transactions with Iran or face asset freezes and other punishments The United States has insisted SWIFT stop financial transactions with Iran or face asset freezes and other punishments
Highlights Highlights
SWIFT is a global provider of banking transaction services based in Belgium , The United States says SWIFT should cease financial transactions with Iran or face punishments , Ripple is a U.S.-based potential SWIFT competitor that provides payment services based on cryptocurrency , US marginalization of SWIFT could help pave way for Ripple to edge into market SWIFT is a global provider of banking transaction services based in Belgium , The United States says SWIFT should cease financial transactions with Iran or face punishments , Ripple is a U.S.-based potential SWIFT competitor that provides payment services based on cryptocurrency , US marginalization of SWIFT could help pave way for Ripple to edge into market
Content Content
On June 6, the <em><a href="https://www.ft.com/content/9f082a96-63f4-11e8-90c2-9563a0613e56">Financial Times</a></em> reported the administration of President Donald J. Trump is planning punishments for any company doing business with Iran. A company that could be affected by U.S. sanctions is the Society for Worldwide Interbank Financial Telecommunication, commonly known as SWIFT. Founded in 1973, <a href="https://www.swift.com/about-us/legal/compliance/swift-and-sanctions">SWIFT</a> is a global provider of secure financial messaging and transaction services commonly used by banks around the world. On June 6, the <em><a href="https://www.ft.com/content/9f082a96-63f4-11e8-90c2-9563a0613e56">Financial Times</a></em> reported the administration of President Donald J. Trump is planning punishments for any company doing business with Iran. A company that could be affected by U.S. sanctions is the Society for Worldwide Interbank Financial Telecommunication, commonly known as SWIFT. Founded in 1973, <a href="https://www.swift.com/about-us/legal/compliance/swift-and-sanctions">SWIFT</a> is a global provider of secure financial messaging and transaction services commonly used by banks around the world.
The United States has stated that SWIFT must cease financial transactions with Iran or face frozen assets and other punishments. The United States has stated that SWIFT must cease financial transactions with Iran or face frozen assets and other punishments.
But is the Trump administration's demand really about Iran? Or is it an attempt by the United States government to conquer the international payment market and its data? But is the Trump administration's demand really about Iran? Or is it an attempt by the United States government to conquer the international payment market and its data?
<h2>Why US dominates digital economy</h2> <h2>Why US dominates digital economy</h2>
The United States dominates most digital markets via search engines, social media, website builders and operating systems based in the country. Through these platforms and others, the United States likely has access to the data and information of not only American citizens, but citizens and companies worldwide. This unique access to worldwide data is the basis of the United States' primacy in the digital economy. The United States dominates most digital markets via search engines, social media, website builders and operating systems based in the country. Through these platforms and others, the United States likely has access to the data and information of not only American citizens, but citizens and companies worldwide. This unique access to worldwide data is the basis of the United States' primacy in the digital economy.
However, one essential item is missing in the country's data bucket: control of international payment transactions. However, one essential item is missing in the country's data bucket: control of international payment transactions.
SWIFT is a cooperative company that says it connects more than <a href="https://www.swift.com/about-us/legal/compliance/swift-and-sanctions">11,000 financial institutions worldwide</a>. It maintains a secure messaging system banks use for international transactions. The company is headquartered in Belgium, but has data centers in the Netherlands and United States, with backup facilities in Switzerland.  <a href="https://www.swift.com/">SWIFT</a> is a cooperative company that says it connects more than <a href="https://www.swift.com/about-us/legal/compliance/swift-and-sanctions">11,000 financial institutions worldwide</a>. It maintains a secure messaging system banks use for international transactions. The company is headquartered in Belgium, but has data centers in the Netherlands and United States, with backup facilities in Switzerland.
SWIFT values its neutrality and goes to great lengths to prevent outside parties gaining access to its financial messages and transaction records. SWIFT values its neutrality and goes to great lengths to prevent outside parties gaining access to its financial messages and transaction records.
  On October 23, 2013, the EU parliament passed a <a href="http://www.europarl.europa.eu/sides/getDoc.do?type=TA&amp;reference=P7-TA-2013-0449&amp;language=EN">resolution </a>suspending the international Terrorist Finance Tracking Program "as a result of US National Security Agency (NSA) surveillance." The resolution was a reaction to news that the NSA had created illegal backdoors into SWIFT servers located in the United States in order to tap into international payment records.
The U.S. National Security Agency (NSA) has allegedly attempted to gain illegal access to SWIFT. In April 2017, the <em><a href="https://www.americanbanker.com/news/alleged-nsa-hack-of-swift-service-bureau-revives-back-door-debate">American Banker</a></em> reported that the NSA had managed to gain access to SWIFT data on some Middle Eastern banks by hacking a third-party facilitator of SWIFT connectivity located in Dubai. On June 6, the <a href="https://www.ft.com/content/9f082a96-63f4-11e8-90c2-9563a0613e56"><em>Financial Times</em> </a>reported that in 2006 the United States had hacked SWIFT's U.S. servers to gain access to international financial transactions.  A second NSA hack of SWIFT payment information was reported in April 2017 in the <a href="https://www.americanbanker.com/news/alleged-nsa-hack-of-swift-service-bureau-revives-back-door-debate"><em>American Banker</em></a>. That publication reported the NSA had managed to gain access to SWIFT data on some Middle Eastern banks by hacking a third-party facilitator of SWIFT connectivity located in Dubai through an <a href="https://www.reuters.com/article/us-usa-cyber-swift-idUSKBN17H0NX">unsecured patch in MS Windows</a>.
<h2>A crypto challenger emerges</h2> <h2>A crypto challenger emerges</h2>
An American competitor to SWIFT is the U.S.-based crypto company <a href="https://ripple.com/">Ripple</a>. Ripple provides an international payment system based on cryptocurrency. Ripple is promoting its system as an alternative to SWIFT for fast international transactions between banks.  
  A possible American competitor to SWIFT is the California-based crypto company <a href="https://xrpcharts.ripple.com/#/">Ripple</a>. Ripple provides an international payment system based on cryptocurrency. Ripple is <a href="https://www.forbes.com/sites/tomgroenfeldt/2017/10/25/did-ripple-hijack-the-swift-conference-or-merely-borrow-some-audience/#6d295eaf39ce">aggressively promoting its operation</a> (<em>Forbes</em>) as an alternative to SWIFT for fast international transactions between banks.
On June 7, the <em>Financial Times</em> reported <a href="https://www.ft.com/content/8dcd3fa4-adbb-11e7-beba-5521c713abf4">Ripple has a $15 billion war chest</a> to finance a hoped-for takeover of the international payment market. The company was founded in 2012. To date, more than 100 financial institutions have signed up with <a href="https://www.nytimes.com/2018/01/04/technology/bitcoin-ripple.html">Ripple</a>, which establishes it as a potential competitor to SWIFT.  The <a href="https://www.ft.com/content/8dcd3fa4-adbb-11e7-beba-5521c713abf4"><em>Financial Times</em></a> reported <a href="https://www.ft.com/content/8dcd3fa4-adbb-11e7-beba-5521c713abf4">Ripple has a $15 billion war chest</a> to finance a hoped-for takeover of the international payment market. The company was founded in 2012. To date, more than 100 financial institutions have signed up with <a href="https://www.nytimes.com/2018/01/04/technology/bitcoin-ripple.html">Ripple</a>, which establishes it as a potential competitor to SWIFT.
  If Ripple manages to displace SWIFT as the world's primary facilitator of international banking transactions, it would mean a replacement of a neutral international nonprofit organization (SWIFT) by a for-profit company (Ripple) subject to <a href="https://ripple.com/terms-of-use/">California and U.S. laws</a> governing international financial payments.
  Ripple uses a distributed encrypted ledger. Each user has <a href="https://ripple.com/jp/build/ledger-format/">a copy of the ledger</a> providing full payment information.
  <h2>US interest in global financial data</h2>
  The safety of data in the United States is unclear. An 2017 article published by <a href="https://uk.practicallaw.thomsonreuters.com/6-502-0467?transitionType=Default&amp;contextData=(sc.Default)&amp;firstPage=true&amp;bhcp=1">Thomson Reuters</a> describes a panoply of federal privacy-related laws that regulate the collection and use of personal data.
  However, in a November 2017 <a href="https://www.gpo.gov/fdsys/pkg/CRPT-115srpt182/html/CRPT-115srpt182.htm">report from the U.S. Senate Intelligence Committee</a> regarding the extension of the <a href="https://en.wikipedia.org/wiki/Foreign_Intelligence_Surveillance_Act_of_1978_Amendments_Act_of_2008">Foreign Intelligence Surveillance Act Amendments Act</a>, Democratic Senator Ron Wyden wrote in his minority opinion: "Under current law, the CIA, NSA and FBI can conduct these searches for no other reason than that they reasonably believe the searches will turn up foreign intelligence information."
A takeover of the international payment market by Ripple – a California-based company that makes its transactions in a distributed ledger – would be important for the United States. If Ripple manages to displace SWIFT as the world's primary facilitator of international banking transactions, it would mean a neutral international nonprofit organization (SWIFT) would be replaced by a for-profit company (Ripple) subject to U.S. laws governing international financial transactions. Having made at least two attempts to hack SWIFT, the U.S. government appears highly interested in international payment data. If the global preference for making international payments migrated from SWIFT to Ripple, the U.S. government would have much easier access to information on global payment transactions, and could theoretically access that information without informing the parties involved. Such an outcome would vastly increase U.S. control over international payment transactions.
American-owned Ripple must abide by U.S. law. If the U.S. government wanted access to the data of all its payment transactions, the company would be obliged to cooperate. Even if a legal government seizure of records didn't occur, there's a considerable chance of a breach via a software backdoor to the data. Outsiders can't verify the data security of Ripple.  
In December 2017, SWIFT published an opinion article about blockchain technology (which is used by Ripple) in an IM Forum. The article claimed blockchain cannot yet handle one million financial transactions a minute, as SWIFT says it currently does. The article stated that a standard for international transactions should carry money from national banks, backed by governments instead of cryptocurrencies with no official backing or only the backing of a commercial company.  
Financial transactions are not secure, because encrypted transactions might be reverse-engineered. A semi-centralized version of blockchain technology such as Ripple would be the next step in more secure payments worldwide. But what implications does an American company owning the financial transaction data of the world have on a socioeconomic scale?  
  Even if a legal government seizure of records didn't occur, there's a reasonable chance of a breach via a software backdoor to the data. Outsiders can't verify the data security of Ripple.
  <h2>A SWIFT response</h2>
  In December 2017, SWIFT published <a href="https://s3-eu-west-1.amazonaws.com/wikitribune-uploads-master/2018/06/13162431/swift-dec-2017_solutions_newsletter_blockchain_cash_securities_settlement_space_utopia.pdf">an opinion article</a> about blockchain technology (which is used by Ripple) in an IM Forum. The report claimed blockchain cannot yet handle one million financial transactions a minute, as SWIFT says it currently does. The report stated that a standard for international transactions should carry money from national banks, backed by governments instead of cryptocurrencies with no official backing or only the backing of a commercial company.
  Financial transactions are not secure, because encrypted transactions might be <a href="https://s3-eu-west-1.amazonaws.com/wikitribune-uploads-master/2018/06/13162751/1712-MI-Forum-swift-solutions_newsletter_blockchain_cash_securities_settlement_space_utopia.pdf">reverse-engineered</a>. Only a semi-centralized version of blockchain technology could be secure.
  SWIFT concludes that widely distributed confidential information (such as its rival Ripple's ledger) can never be completely safe.
  What implications does an American company keeping records on the financial transaction data of the world have on a socioeconomic scale?
Categories Categories
Asia, Cryptocurrencies, Economics, Europe, European Union, Politics, Technology, Uncategorised, Cryptocurrencies Asia, Cryptocurrencies, Economics, Europe, European Union, Politics, Technology, Uncategorised, Cryptocurrencies
Article type Article type
analysis analysis
Tags Tags
Digital currencies, Iran nuclear deal, President Trump, Ripple, SWIFT  Digital currencies, Digital Economy Act 2017, Iran nuclear deal, President Trump, Ripple, SWIFT, worl, world, World Economic Forum
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Sources Sources
  <h2>Sources</h2>
  <p>Title article: <strong>Ripple XPR vs. SWIFT – A revalry that has barely started</strong></p>
  <p><em>Globalcoinreport.com</em></p>
  <p>Author – Date: Ali Qamar 7th June 2018</p>
  <p><a href="https://globalcoinreport.com/ripple-xrp-swift-rivalry/" rel="nofollow">https://globalcoinreport.com/ripple-xrp-swift-rivalry/</a></p>
  <p>_________________________________________________________________________________________________</p>
  <p>&nbsp;</p>
  <p>Title article: Swift shows impact of Iran dispute on international business<br />
  Financial Times</p>
  <p>Author &#8211; Date: Michael Peel and Jim Brunsden in BrusselsJUNE 6, 2018</p>
  <p>&nbsp;</p>
  <p><a href="https://www.ft.com/content/9f082a96-63f4-11e8-90c2-9563a0613e56" rel="nofollow">https://www.ft.com/content/9f082a96-63f4-11e8-90c2-9563a0613e56</a></p>
  <p>&nbsp;</p>
  <p>_________________________________________________________________________________________________</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title Article: <strong>Ripple and Swift slug it out over cross-border payments</strong></p>
  <p><em>Financial Times</em></p>
  <p>Author &#8211; Date:Martin ArnoldJUNE 6, 2018</p>
  <p>&nbsp;</p>
  <p><a href="https://www.ft.com/content/631af8cc-47cc-11e8-8c77-ff51caedcde6" rel="nofollow">https://www.ft.com/content/631af8cc-47cc-11e8-8c77-ff51caedcde6</a></p>
  <p>&nbsp;</p>
  <p>_________________________________________________________________________________________________</p>
  <p>&nbsp;</p>
  <p>Title article: <strong>Rise of Bitcoin Competitor Ripple Creates Wealth to Rival Zuckerberg</strong></p>
  <p><em>New York Times</em></p>
  <p>Author – Date: Nathaniel Popper 4th January 2018</p>
  <p>&nbsp;</p>
  <p><a href="https://www.nytimes.com/2018/01/04/technology/bitcoin-ripple.html" rel="nofollow">https://www.nytimes.com/2018/01/04/technology/bitcoin-ripple.html</a></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title article: <strong>Did Ripple Hijack The Swift Conference, Or Merely Borrow Some Audience?</strong></p>
  <p><em>Forbes</em></p>
  <p>Author – Date: Tom Groenfeldt</p>
  <p><a href="https://www.forbes.com/sites/tomgroenfeldt/2017/10/25/did-ripple-hijack-the-swift-conference-or-merely-borrow-some-audience/#1d6ed0b939ce" rel="nofollow">https://www.forbes.com/sites/tomgroenfeldt/2017/10/25/did-ripple-hijack-the-swift-conference-or-merely-borrow-some-audience/#1d6ed0b939ce</a><br />
  Senate Report 115-182</p>
  <p>From the U.S. Government Publishing Office</p>
  <p>Date : 7th November 2017</p>
  <p>Subject : FISA Amendments Reauthorization Act of 2017</p>
  <p>Report from Mr. Burr, from the Select Committee on Intelligence.</p>
  <p>&nbsp;</p>
  <p><a href="https://www.gpo.gov/fdsys/pkg/CRPT-115srpt182/html/CRPT-115srpt182.htm" rel="nofollow">https://www.gpo.gov/fdsys/pkg/CRPT-115srpt182/html/CRPT-115srpt182.htm</a></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>__________________________________________________________________</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title article: <strong>Blockchain company Ripple says it has $15bn war chest</strong></p>
  <p><em>Financial Times</em></p>
  <p>Author &#8211; Date: Martin Arnold in London  OCTOBER 10, 2017</p>
  <p>&nbsp;</p>
  <p><a href="https://www.ft.com/content/8dcd3fa4-adbb-11e7-beba-5521c713abf4" rel="nofollow">https://www.ft.com/content/8dcd3fa4-adbb-11e7-beba-5521c713abf4</a></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title article: <strong>Data protection in the United States: overview</strong></p>
  <p><em>Thomson Reuters</em></p>
  <p>Author – Date: Leuan Jolly, Loeb &amp; Loeb</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p><a href="https://uk.practicallaw.thomsonreuters.com/6-502-0467?transitionType=Default&#038;contextData=(sc.Default)&#038;firstPage=true&#038;bhcp=1" rel="nofollow">https://uk.practicallaw.thomsonreuters.com/6-502-0467?transitionType=Default&#038;contextData=(sc.Default)&#038;firstPage=true&#038;bhcp=1</a></p>
  <p>____________________________________________________________________</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title article: <strong>Alleged NSA hack of Swift service bureau revives ‘back door’ debate</strong></p>
  <p><em>American Banker</em></p>
  <p>Author – Date: 17th April 2017 Penny Crosman</p>
  <p><a href="https://www.americanbanker.com/news/alleged-nsa-hack-of-swift-service-bureau-revives-back-door-debate" rel="nofollow">https://www.americanbanker.com/news/alleged-nsa-hack-of-swift-service-bureau-revives-back-door-debate</a></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title article: <strong>Why Swifts Days are Numbered, and What’s Next</strong></p>
  <p><em>Channelfutures.com</em></p>
  <p>Date: 3 January 2017</p>
  <p>&nbsp;</p>
  <p><a href="http://www.channelfutures.com/technology/why-swift-s-days-are-numbered-and-what-s-next" rel="nofollow">http://www.channelfutures.com/technology/why-swift-s-days-are-numbered-and-what-s-next</a></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>_________________________________________________________________________________________________</p>
  <p>&nbsp;</p>
  <p>Title report : <strong>SWIFT Distributed Ledgers, Smart Contract, Business Standards and ISO 2022</strong></p>
  <p>Author – Date: 2018<br />
  <a href="https://www.swift.com/sites/default/files/resources/swift_info_paper_distributedledgerstandards.pdf" rel="nofollow">https://www.swift.com/sites/default/files/resources/swift_info_paper_distributedledgerstandards.pdf</a></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title report: <strong>SWIFT Annual review 2016</strong></p>
  <p>Author – Date: 2017</p>
  <p>&nbsp;</p>
  <p><a href="https://www.swift.com/file/41331/download?token=234C_UM_" rel="nofollow">https://www.swift.com/file/41331/download?token=234C_UM_</a></p>
  <p>&nbsp;</p>
  <p>&nbsp;</p>
  <p>Title report: <strong>SWIFT on distributed ledger technologies – Position paper</strong></p>
  <p>Author – Date: April 2016 &#8211; Accenture Frederic Le Borne, David Treat, Fernand Dimidschtein, Chris Brodersen</p>
  <p>&nbsp;</p>
  <p><a href="https://www.swift.com/insights/press-releases/swift-and-accenture-outline-path-to-distributed-ledger-technology-adoption-within-financial-services" rel="nofollow">https://www.swift.com/insights/press-releases/swift-and-accenture-outline-path-to-distributed-ledger-technology-adoption-within-financial-services</a></p>

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