BRICS News: Russia and Iran Challenge Western Dominance with SWIFT Alternative

• Russia and Iran have joined forces to create an alternative to the SWIFT payment system, aiming to bypass the international financial network controlled by the West. 
• Both countries plan to use the system to streamline cross-border transactions, aiming to strengthen bilateral trade and enhance financial cooperation.

For over a decade, Russia has been actively working to diminish its dependence on the U.S. dollar and Western financial systems. This endeavor now includes a major collaboration with Iran. Together, they are working on creating a secure financial messaging system to replace the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global organization that facilitates secure financial messaging for international transactions.

In recent reports, Iranian Ambassador to Moscow Kazem Jalali highlighted the significant progress in the financial collaboration between Russia and Iran. “I can call 2025 the year in which financial issues in Russian-Iranian relations will be resolved,” Jalali stated in an interview with IRIB TV.

Diplomatic and Financial Collaboration

A key aspect of this is the expansion of bilateral trade and financial exchanges that bypass the U.S. dollar, a goal that Iran and Russia have set for their future economic relations. Chairman of the Central Bank of Iran, Mohammad Reza Farzin, recently traveled to Moscow to accelerate the implementation of financial agreements with the Bank of Russia. 

This visit was timed with the arrival of Iranian President Masoud Pezeshkian, who traveled to Russia on January 17 to sign the Strategic Partnership Agreement. This treaty is designed to deepen cooperation in multiple sectors, including defense, energy, counterterrorism, agriculture, technology, and more.

Pezeshkian expressed confidence in the strength of the partnership, emphasizing the ability of Iran and Russia to operate free from external interference. “We have good neighbors with great potential. We can say that we will not need to listen to the advice of overseas countries,” he remarked following the signing of the agreement.

The End of Dollar Dependency in Trade by BRICS

Since the United States reimposed sanctions on Iran in 2018, Iranian banks have been excluded from SWIFT, significantly hampering their ability to engage in international financial transactions. Similarly, in 2022, several of Russia’s largest banks were removed from SWIFT in response to its invasion of Ukraine. 

In 2024, Iran and Russia began integrating their banking systems, facilitating the use of Iranian bank cards in Russia and Russian cards in Iran. This was a significant step forward in their efforts to establish a functioning non-dollar financial infrastructure. Furthermore, as of November 2024, both countries removed the U.S. dollar from their bilateral trade transactions.

The BRICS alliance, originally consisting of Brazil, Russia, India, China, and South Africa, expanded in 2024 to include Egypt, Ethiopia, Iran, and the United Arab Emirates (UAE). The BRICS countries have been increasingly focused on creating financial mechanisms that bypass the U.S. dollar, and a major development in this area came during the 16th BRICS summit held in Kazan, Russia, in October 2024. At the summit, the BRICS Pay initiative was introduced as a decentralized payment system that would allow member countries to conduct transactions without converting to U.S. dollars.

This system relies on blockchain technology and digital tokens, providing an innovative and efficient method for intra-BRICS trade. BRICS Pay is particularly significant because it allows member states to avoid the SWIFT network, thereby reducing costs and enhancing financial autonomy.