The SWIFT system is essentially the "WhatsApp" of banks. It doesn't physically move money, but sends secure and standardized messages so that banks know what to do with the funds.

Here I explain what it's about and how it connects with the banking reality of Venezuela. 👇🏼

What is SWIFT? 🤔

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It is a global network that connects more than 11,000 financial institutions in over 200 countries.

🏦💸☝🏼Its function: To provide a unique identification code (the BIC/SWIFT code) to each bank.

⚠️ What it is NOT: It is not a bank account, it does not hold money, nor is it a settlement system. It is just the messenger that says: "Hey, Bank A sends $1,000 to Bank B for client X."

SWIFT and Venezuelan Banking

The relationship between SWIFT and Venezuelan banks is complex due to the political and economic landscape of recent years. Here are the key points:

1. International Sanctions

Since 2019, due to sanctions imposed by the U.S., the Central Bank of Venezuela (BCV) and state banks like Banco de Venezuela or Bicentenario have faced severe restrictions to operate in this network. This disconnected much of the public banking from the global financial system. Basically, we are not connected to the international banking network. 🌐

2. The Isolation of Correspondent Banking

For a Venezuelan bank to use SWIFT, it needs a correspondent bank (an intermediary abroad, usually in the U.S. or Europe). Due to fear of indirect sanctions (over-compliance), many international banks severed ties with Venezuela.

Summary: Making an international transfer from Venezuela has become extremely difficult, slow, and costly due to interbank fees.

3. The Resistance of Private Banking

Several private Venezuelan banks still have access to SWIFT, but operate under extreme scrutiny. This explains why, if you try to receive a transfer from abroad, the bank asks you for a lot of documentation to justify the origin of the funds.

4. Local and International Alternatives

Given the limitations of SWIFT, Venezuela has sought alternative ways:

  • Use of other systems: The connection with the SPFS system (Russia) or the CIPS (China) has been explored.

  • Cryptocurrencies: The use of stablecoins (like USDT) has become popular as a way to "bypass" the SWIFT bureaucracy for international payments #BinanceWallet

Summary of the current banking situation in Venezuela despite the new political landscape.🗞️

🏧 Public Bank

Mostly disconnected or restricted due to sanctions.

💱 Private Bank

Operational, but with few correspondent banks available.

🏷️ Costs

Very high due to fees from intermediary banks.

⌛Time

A transfer that previously took 24 hours can now take days or weeks.

📝Note

Although SWIFT remains the standard, in Venezuela the system (practically non-existent) feels "heavy" due to financial blockages, which has pushed companies and citizens to use Zelle-type transfers or currency custody accounts within the country that do not go through the international network.

This also affects bonds, securities, and shares of various companies and government entities with deposit accounts in the USA, currently frozen.