Written by Consultant Mustafa Al-Manea
In light of the transformations taking place in the global financial system, and amid reports that China plans to link its digital renminbi settlement system with ASEAN countries and some Middle Eastern nations, discussions have intensified regarding the future of the SWIFT system, which has long formed the backbone of global trade.
However, what some analyses overlook is that technological transformation cannot justify dismantling or replacing the global financial and legal system with parallel mechanisms that operate outside sovereign oversight.
While China is expanding its financial influence through its “digital bridge,” some countries and local banking systems have opened discussions about creating alternative transfer systems under the pretext of speeding up payments and bypassing SWIFT’s constraints. Yet this approach represents a dangerous slide toward a parallel financial system that threatens banking integrity and weakens international trust.
SWIFT: A Standard of Security and Transparency
Beyond politics, SWIFT is not merely a payment system—it is a comprehensive legal and technical framework representing the largest and most secure global database for banking messages.
- SWIFT operates under strict anti–money laundering and counter–terrorist financing (AML/CFT) standards.
- It is collectively supervised by the central banks of member states, ensuring every transaction is documented and legally traceable.
- Departing from it effectively means entering a financial “gray zone,” undermining national banking credibility and exposing institutions to international sanctions.
SWIFT Is Not a Slow System
What some describe as “slowness” in SWIFT settlements is not a technical weakness, but rather part of a legal protection mechanism that ensures every transaction is verified for legitimacy.
Meanwhile, the ultra-fast operations of parallel systems—despite their technical appeal—can open the door to financial crimes and money laundering disguised as “digital transformation.”
The U.S. Federal Reserve regularly confirms that parallel settlement systems operating outside SWIFT do not meet international compliance standards, and any dealings with them may be considered a violation of financial compliance regulations.
Libyan Law Rejects Parallel Systems
According to Law No. (1) of 2005 on Banks and its amendments, the Central Bank of Libya (CBL) is the only authority authorized to regulate cash movements and foreign transfers. These same regulations are reinforced by Libya’s anti–money laundering and counter–terrorist financing laws, which are binding internationally as well as nationally.
The CBL’s circulars explicitly prohibit any financial or banking transactions conducted outside approved official channels.
Therefore, any attempt to create an alternative transfer system—regardless of intent—constitutes a direct violation of Libyan law and poses a threat to the nation’s financial security.
Strategic Risks of Parallel Systems
- Loss of Legal Traceability: Audit and supervisory authorities cannot track funds moving outside SWIFT channels.
- Exposure to Sanctions: Any parallel dealings with sanctioned entities may subject participants to identical penalties.
- Erosion of International Trust: Correspondent banks and global transfer firms rely on SWIFT’s transparency record as a security benchmark.
- Threat to Monetary Sovereignty: Parallel systems create a “shadow economy” beyond central bank control, weakening monetary policy and fueling the uncontrolled creation of money—one of the gravest threats to national currency stability.
Digitization Is Not a Substitute for Oversight
Financial digitalization must occur within legal and institutional frameworks, not through independent or gray channels.
While China has developed its digital currency as part of its broader strategy, transplanting this model into economies facing structural challenges—such as Libya—poses greater risks. In such contexts, parallel systems could become a cover for smuggling, manipulation, and other illicit practices.
In Conclusion
SWIFT is not a Western monopoly but a legal framework that ensures international financial integrity. Any interference with it within the Libyan system—under any justification—represents a departure from monetary legitimacy and a direct threat to the stability of the national currency and Libya’s banking reputation.
True transformation lies not in creating parallel systems but in modernizing the infrastructure within the existing legal framework, rebuilding trust with international institutions—not arousing their suspicion.
Libya’s economy today is in dire need of restoring confidence with the global financial system, not testing it through risky parallel experiments. “May this serve as a clear message.”
About the Author:
Mustafa Al-Manea is a Libyan lawyer and legal and economic expert with over 23 years of experience. He has worked with various investment institutions, sovereign funds, and banks in Libya and abroad, and serves as an expert for international research centers. He has also been an advisor to the Central Bank of Libya, a board member of the Libyan Investment Authority and the Libyan Foreign Bank, and has represented Libya at the World Bank and IMF meetings.
Al-Manea contributed to Libya’s compliance with international AML/CFT requirements, heads the executive team for the Prime Minister’s initiatives and strategic projects, and is a member of the Libyan-American Council for Trade and Investment. He has also served as a trainer and lecturer for the American Bar Association and the European Lawyers Association, and has published numerous research papers and articles in Arab, American, and European media.
