The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is an essential financial institution that most people have never heard of. Over $400 billion flows through SWIFT every day, connecting over 11,000 banks and financial institutions in over 200 countries. It is the backbone of the global financial system and impacts everyone, even if indirectly. SWIFT recently completed a pilot program to transact central bank digital currency (CBDC) transactions, indicating that the current global financial establishment is preparing for the release of CBDCs.
CBDCs are digital versions of fiat money issued by central banks using blockchain technology. About 130 countries, including the United States, Canada, and China, are working on or adopting CBDCs. This represents 98% of the global economy. While CBDCs may have benefits, such as faster and cheaper transactions, they also pose a threat to financial privacy.
SWIFT’s adoption of blockchain technology through a trial using Chainlink’s Cross-Chain Interoperability Protocol for real-time settlement demonstrates the potential for a CBDC-based financial system. Blockchain technology allows for fast and low-cost transactions, which contrasts with SWIFT’s current system, which can be expensive and slow.
However, SWIFT’s centralized control over the global financial system poses a threat to financial privacy. Governments have used SWIFT to enforce sanctions on countries like Iran and Russia, cutting off their financial access. If SWIFT can cut off entire countries, it can also target individuals, limiting their financial freedom. The shift to CBDCs will make transactions fully traceable and subject to government scrutiny.
To protect against the loss of financial privacy, individuals can opt out of the CBDC system by owning bitcoin and physical gold. Bitcoin is a decentralized digital currency that allows for self-custody, ensuring that no one can confiscate it. It also enables permissionless transactions with no counter-party risk. Physical gold provides an asset outside the currency system and acts as a long-term inflation hedge.
Even a small allocation to bitcoin and gold can help individuals protect their wealth and maintain financial privacy in a CBDC-dominated future. It is important to prepare now before the U.S. government replaces physical cash with a digital dollar. SWIFT’s centralized control and the potential for government surveillance should prompt individuals to take action to safeguard their financial freedom.
