Why is SWIFT broken

Why Sending Money From São Paulo to La Paz Is Harder Than It Should Be

If you haven't been living under a rock since the early 21st century, I imagine you've made a purchase abroad at some point. Maybe something from the United States or China. Even though these countries might be at a reasonable distance from you, the path money takes is relatively simple: one large bank sends your money to another large bank.

Now think about what it takes to send money from São Paulo (Brazil) to La Paz (Bolivia). It should be simple, right? After all, the countries share a border. But that is where you would be wrong.

The payment has to travel about 10,000 km (more than 3x the distance between the cities). Along the way, it passes through at least 3 countries and half a dozen financial institutions, navigating various types of regulation and adding a good amount of fees.

Unfortunately, this reality doesn't just happen in Latin America. It applies to most countries outside the G20.

While information travels instantly from your phone, money seems stuck in a system that holds it back. That system is called SWIFT (Society for Worldwide Interbank Financial Telecommunication).

What Is SWIFT?

The year was 1973, 239 ambitious banks, 15 countries and one shared vision: transforming the way value travels across borders. The Telex era had come to an end with the birth of SWIFT.

Acting as a global corporation of financial institutions, SWIFT is a unified, secure and standardized network for institutions to exchange financial instructions. For example, Bank X will send a message to Bank Y to carry out a transaction between Company A and Company B. In other words, it doesn't transfer money. SWIFT is the messaging system, like WhatsApp.

Over the last 50 years, it became the default architecture of the global economy. In 2026, the network connects more than 11,500 institutions and processes 53 million financial messages per day. SWIFT replaced its predecessor long ago and is now, by any measure, the backbone of the global economy.

At least, that is the story that the skilled marketing teams at major banks have told well. In reality, SWIFT still carries limitations from the Telex era, while the backbone of the global economy is restricted to a select number of countries.

What Is SWIFT's Problem?

Honestly, there really isn't one, unless you happen to operate outside of the major economies.

Moving money within the G20, the system is largely invisible and apparently seamless. The major corridors have deep liquidity, direct banking relationships and competitive pricing. Yet anywhere outside that group operates on infrastructure that is slow, bureaucratic and expensive.

For the remaining countries, the picture is harder. The Bank for International Settlements counted a 22% decline in active correspondents between 2011 and 2019. In North America that decline was 13%, while in Latin America it was 34% and in Pacific countries it reached 60%.

Today, 75% of international transactions pass through intermediaries, involving on average three or four banks. This increases regulatory complexity, leads to frequent delays and adds fees at every bank along the way.

A careful observer might point out that payments are now instant. Maybe they are using an app like Wise to send money to a friend abroad. But what is actually happening beneath the surface is pre funding — Wise allocates money around the world before the transfer request is made. It looks instant. However, the cost is not. In Brazil, for every $100 million in annual "instant" payments, between $240,000 and $1.25 million is spent on funding.

That is the exact structure used by Florentine merchants in 1383. The same model applied differently because technology evolved. So the problem is not in the technology. It is in the system we chose to keep.

What Are the Alternatives to SWIFT?

Understanding this as a systems problem and not a software problem, alternatives are being built around the world.

Currently, initiatives shaped by the nearshore geopolitical realignments underway are being developed. China has CIPS, while leading similar projects with the rest of the BRICS bloc. The US has Global ACH.

Yet the truth is that all of these options are just derivatives of the same principle. The real evolution, in my view, is in the use of blockchain and stablecoins, replacing the existing infrastructure with one built around the user.

Where UnblockPay Fits

UnblockPay builds the stablecoin infrastructure that makes this replacement practical for companies operating in Latam. A single API handles conversion, local rail routing (Pix, SPEI, SEPA, Wire and ACH) and settlement, without the correspondent bank chain.

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