Can UPI Replace Swift?

Do you need to send money to someone else in another country? Today, walking into a bank and transferring money anywhere in the world is simple, but how does this work?

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) technology is at the heart of most international money and security transactions.

SWIFT is a large messaging network used by banks and other financial organizations to send and receive information such as money transfer orders swiftly, correctly, and securely.

We all know that there is a war going on between Ukraine and Russia right now, and as a result, the United States of America has talked about imposing a slew of new sanctions on Russia in order to support Ukraine.

One of these sanctions is that the United States of America wants to ban Russia from using the SWIFT payment system, which would cause the Russian economy to suffer significant losses.

  • SWIFT, or the Society for Worldwide Interbank Financial Telecommunications, is an international organization that makes a significant contribution to making international payments seamless and simple.
  • Although it has its headquarters in Belgium, developed countries such as the United States and the United Kingdom have a significant effect on this institution.
  • It is self-evident that if the United States of America prohibits Russia from utilizing the SWIFT system, the latter’s economy would suffer.

The SWIFT system facilitates the world’s second-largest international transaction, which occurs in Russia. In this Scenario, many economists believe that UPI might be a viable alternative to SWIFT in terms of efficiently processing international transactions. Let’s take a closer look at this topic.

Can UPI Replace SWIFT?

As we all know, the full name of UPI is the Unified Payment System, and it was created in 2016 by the National Payment Corporation of India.

With UPI, you may quickly transfer money from one bank to another using only your mobile phone. In India, UPI is now regarded as the most successful payment system.

India must take the lead in developing the GPI and establishing a parallel banking network with other countries in order to reduce the cost of SWIFT (Society for Worldwide Interbank Financial Telecommunication) and to prevent European powers from unilaterally deciding which countries can or cannot trade with Russia or any other country. SWIFT’s reign must come to an end, and GPI must take its place.

UPI has the capacity to scale up quickly and has so far managed to keep hackers at bay. For any global payment interface (GPI) to the e-Rupee, security and scalability will be critical.

As a result, RBI should establish the e-Rupee as a GPI that may be shared with every central bank in the globe as a digital public good.

The e-Rupee pilot program should include not just converting or trading digital rupees into fiat money and back, but also exchanging with other central banks.

India should create and distribute the GPI stack as a digital public benefit that can be used in its digital diplomacy with all countries. 

Anyway, India’s economy is currently on the way to becoming the world’s largest economy and in such a situation, if India is successful in controlling the international payment system as well, then it is obvious that no one can stop India from becoming the world’s superpower.

Final Conclusion on Can UPI Replace Swift?

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