JPC Recommendations on SWIFT Alternative: Out of scope and Disruptive of Global Economic System

One of the surprising inclusions in the recommendations of the JPC on PDPB is related to the SWIFT network. The recommendation 8 states

“The Committee observe that data protection in the financial sector is a matter of genuine concern worldwide, particularly when through the SWIFT network, privacy has been compromised widely. Indian citizens are engaged in huge cross border payments using the same network.

The Committee are of the view that an alternative to SWIFT payment system may be developed in India which will not only ensure privacy, but will also give boost to the domestic economy.

The Committee, therefore strongly recommend that an alternative indigenous financial system should be developed on the lines of similar systems elsewhere such as Ripple (USA), INSTEX (EU), etc. which would not only ensure privacy but also give a boost to the digital economy.”

Clearly, this recommendation is extraneous to the subject on hand and the committee could have avoided this topic which was more appropriate for Cyber Security.

There was a section of the industry which was insisting that “Financial Information” should not be considered as “Sensitive personal Information”. At the same time, the MHA was highlighting the Cyber Crime investigative requirements which were being frustrated by some Privacy issues. This also would have surfaced during the discussions on Data Localization.

In this discussion on Cyber Frauds and need for enabling law enforcement to have investigative freedom, some recommendation has been sneaked in regarding “Alternate system for SWIFT” which otherwise is outside the scope of the JPC’s mandate.

It is true that most of the SWIFT frauds were associated with the identity theft of the officials authorized to operate SWIFT account as in the case of the Bank of Bangladesh/City Union Bank frauds or failure of basic information security principles as in the case of PNB-Nirav Modi case. But these were related to compromise of “Business Credentials” through Cyber Criminals and not directly related to “Privacy” of the Bank officials as individual data subjects.

It is therefore intriguing that the JPC was made to add this extraneous comment with the words “Strongly recommend”. This direction is addressed to the RBI and the Ministry of Finance and is not related to the implementation of PDPB 2019.

It is intriguing therefore to ponder why this extraneous recommendation was brought into this JPC report and whether there was some manipulative hands behind this recommendation. I consider that most of the member would not have recognized that this recommendation is related to the destabilization of the country’s economy which is being attempted through the discussions on the Crypto Currency regulation and not to PDPB.

I see a clear motive behind this recommendation to provide a support to the Crypto Currency system with this recommendation for dismantling of the SWIFT system and would like to draw the attention of the chairman of the JPC that the committee was perhaps mislead into adding this recommendation in this report.

For example, the INSTEX EU was a Special Purpose Vehicle (SPV) created by a few members of EU to ensure transactions with Iran outside the regular Banking system because of the US sanctions. Since SWIFT could not be invoked for transfers of money for these trades, an alternative to bypass the sanctions was devised through INSTEX. This is a limited private network for financial settlements for humanitarian aids to one country affected by the sanctions of USA.

RippleNet is another system more directly related to bypassing an established currency exchange system by enabling a peer to peer money settlement system.

Ripple is a protocol is a blockchain based exchange system which presently works for exchange of legit currency. But it is intended to be a monetary system which is decentralized as compared to SWIFT. It creates a layer of money transfer enablement outside the network of Central banks of different countries which SWIFT represents. Use of RIPPLE could violate FEMA but like the Crypto currencies which violate the RBI act, would be adopted by many institutions as an alternative to the use of SWIFT. This system can support the Crypto Currency systems for international drug and arms trade more efficiently than the Crypto exchanges that prevail now. As a result the Crypto currencies would soon be added into the RIPPLE settlement system and it would become one big global financial systems which will eliminate the role of Central Banks and behind that the currency system prevailing in the world.

Once the control of international monetary exchange is removed from the Central banks, the path would be clear to use the same network for exchange of the Digital Black money such as the Crypto Currencies.

Hence this recommendation of the JPC to provide respect to Ripple is a dangerous proposition about which most of the JPC members might not have been aware.

While legitimization of Private Crypto Currencies would destroy the economic system of one country, recognition of Ripple would at one stroke destroy the Global economic system as we know of.

This planting of the idea in an unrelated JPC discussion indicates that the proponents of “Global Economic Destruction System” have their tentacles in several places silently working on sabotaging the established economic system.

The RTGS/IMPS/UPI system used in India is a successfully working real time peer-to-peer settlement system within the regulatory structure of the Central Bank and can be extended globally within the control of the consortium of the Central Banks of the Sovereign Governments to address any inefficiencies of the SWIFT system. However the risks of Cyber Crimes remain whether the system of settlement is SWIFT or Extended RTGS or RIPPLE. Hence the recommendation to replace SWIFT with RIPPLE is a completely undesirable intrusion into the JPC recommendation and must be ignored.

It is necessary to red-flag this recommendation which fortunately has no relation to any of the amendments in the PDPB2019. Many of the Privacy activists may even fail to recognize the implication of this proposition in a JPC.

But let it be on record that Naavi.org is concerned about this inclusion of anti-SWIFT recommendation in the JPC report on PDPB 2019. We consider the Ripple as a destructive mechanism for the Global Financial System and every effort should be taken to bring down the system as it could unite all the private crypto currencies into a monstrous system the impact of which cannot even be imagined. India now has an opportunity to outlaw Ripple as part of the Crypto Currency bill and we must take the lead to enlighten the world about the dangers of Ripple and Crypto currencies.

Naavi

Reference Articles:

Ripple pilots a Private Leger for Central Banks launching CBDCs

The Future of CBDCs

The end of Privacy? Central Banks plan to launch digital coins

Why Governments are wary of Bitcoins

Is Ripple for real? A closer look at the company behind the third most valuable digital currency

Meet Ripple & XRP, Cryptocurrency for Banks

SEC Charges Ripple and two executives with conducting $1.3 billion unregistered securities offering

Ripple Vs SWIFT; Who is going to dominate Inter-Bank Money Transfers?

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