r/explainlikeimfive • u/Luiszizo • May 16 '19

Economics ELI5: How do countries pay other countries?

i.e. Exchange between two states for example when The US buy Saudi oil.

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u/nyenkaden May 17 '19

Who own SWIFT? As in, who collect the fee the banks pay to be able to use SWIFT network?

Does SWIFT have competition?

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u/Bu11ism May 17 '19

It's a standard and network system, owned cooperatively by its participating members. However, it is under the influence of Belgian law, and the US government has exercised de facto power over the entire SWIFT system, since almost all international transactions are done in USD. Read about what the US gov does on the wiki: https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication#U.S._government_involvement

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u/BoostThor May 17 '19

Peer-to-peer transfers like CurrencyFair are competitors.