Dave Moleske 
The most important event of the 2022 Olympic Games did not occur on the alpine slopes, backcountry ski course, or ice rinks; but in conference rooms in the Chinese foreign ministry offices in central Beijing. On February 4th, Vladimir Putin and Xi Jinping held their first in-person meeting since the beginning of Covid-19 and further discussed the ever-rapidly changing scope of geopolitics and international economics. The meeting culminated in the release of a 5,000 word joint statement declaring a ‘‘New Era’’ of global power distribution and shift away from a singular global hegemon to a ‘‘multipolar’’ world. One of the key aspects of the statement was defining the two sides of the new cold war; Russia and China vs US and its Western allies.
The conflict in Ukraine just expedited the friendship in the East. Beijing and Moscow in the statement jointly wrote that together they would “promote the expanded cooperation in three main areas:” economy and finance, politics and security, and humanitarian exchanges. The Russian invasion of Ukraine may prove to be the geopolitical catalyst that eventually merges the two states into the premier alliance of the 21st century. The Russia-Ukraine crisis has resulted in Western countries implementing harsh sanctions against Russia. The most significant facet of the sanctions package is the exclusion of Russian banks from the SWIFT financial messaging system dominated by the US.
SWIFT is backed by the dollar, and connects more than 11,000 financial institutions in more than 200 countries and territories making exclusion from the system the nuclear option of economic statecraft.
The domestic Russian alternative to Swift is SPFS (System for Transfer of Financial Messages). SPFS was created by the Central Bank of Russia in 2014 following the Ukrainian Euromaidan events which culminated in the Western-backed coup d'etat of the president of Ukraine, Viktor Yanukovych. Russia then annexed Crimea and the US and its allies threatened harsh sanctions including the removal of Russia from Swift. Eight years later the West delivered on their threats and barred some Russian banks from the system and likely will restrict more in the near future. The Russian SPFS connects hundreds of Russian banks in conjunction with one another however outside Russia’s border SPFS breaks down. Belarus has begun connecting its banks to SPFS and is seeking further integration into the system but as of now; SPFS does not effectively function at the international level.
The Chinese alternative to SWIFT: CIPS (Cross-Border International Payment System) functions at the international level, unlike SPFS, and its goal is to internationalize the yuan. CIPS has over 1,200 financial institutions in over 100 countries connected and one of the key developments of the Belt and Road initiative. Beijing hopes the yuan-backed CIPS will rival the dollar-backed SWIFT.
CIPS will soon have a multitude of Russian banks seeking to become members; their acceptance into the system will be the first significant agreement since the release of the joint statement during the Olympics and advances their shared economic and financial goals expressed in the 5,000 word quasi manifesto. The economic alliance that has formed between Russia and China will grow much stronger once they integrate CIPS and SPFS with each other.
The successful integration of Russia and SPFS into China and CIPS will not occur in a vacuum and once the two states merge their systems more states will look at CIPS and view it as not just an alternative to SWIFT but rather the financial messaging system that will surpass SWIFT.
The US has used its power to veto states from SWIFT since the system was created in 1973 and has devastated countries economically. The US has imposed maximum pressure sanctions on Iran, North Korea, Cuba, Venezuela, and many more over the decades and the joint declaration exemplifies the push to soften US sanctions through this Sino-Russian alternative. This will allow states sanctioned by the United States to further join the world economy as a legitimate partners, and allow BRI members to further integrate their economies allowing them to circumvent US sanctions and SWIFT removal. The integration of Russia into CIPS could prove to be the premier facet of the New Silk Road and be the first step of economic integration of the global south.
