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Asian Clearing Union to launch banking system to rival SWIFT

Central bank governors or representatives of Asian Clearing Union members pose for a group photo after a summit in Tehran on May 24, 2023.

Members of the Asian Clearing Union (ACU), a regional banking bloc that seeks easier clearing of payments between its member states, have agreed to launch a system that will rival the SWIFT international payment network.

ACU members agreed in a summit in the Iranian capital Tehran on Wednesday to launch their own banking messaging system within a month, according to a deputy governor of the Central Bank of Iran (CBI).

“The (ACU) countries decided to have a customized system for themselves considering that SWIFT is not available to all countries and given that it has its own costs,” said Mohsen Karimi, CBI’s deputy for international affairs.

Karimi said the messaging system will cover all demands for clearing monetary transactions among nine members of the ACU.

The move is in line with statements by ACU members in recent months suggesting they are eager to join regional and international efforts to reduce the weight of the US dollar in global trade, a process which has become known as de-dollarization.

Countries like India and Iran, who are key members of the ACU, have accelerated efforts to de-dollarize their foreign trade, especially since a war broke out in Ukraine in early 2022, leading to Russia’s exclusion from SWIFT.

CBI governor Mohammad Reza Farzin, who became ACU’s rotating chair on Wednesday, said the bloc will seek to admit new members and will diversify the basket of currencies it accepts for payment settlements to help the de-dollarization campaign. 

Belarus and Mauritius applied for ACU membership during the Wednesday summit in Tehran where top bankers from non-member states like Russia were also present.

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