North Korea is a secretive nation-state, with limited access to the outside world. As a result, its economy largely lacks up-to-date technology, leaving it almost completely cut off from many international banking networks, including the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. Contrary to some reports, North Korea has not been granted access to the global financial system, and therefore does not use the SWIFT payment system for financial transactions.
According to the Samsung Economic Research Institute, North Korea does not have the latest computer technology, and its outdated IT systems make it difficult to transfer large amounts of money securely online, as would be required with the SWIFT system. As a result, a more primitive system is used, as North Koreans must transport cash outside the country in order to purchase foreign goods.
Although North Korea is not properly integrated into the global financial system, the country’s leadership has recently made efforts to obtain external funding, which could lead to the country being connected to the SWIFT network in the future. In 2015, North Korea requested the Bank of China to open a North Korean bank account. The move was seen by some as a potential step toward allowing North Korea to access the international financial market; however, since then, growth in the country’s SWIFT participation has stalled.
For its part, the United States has made it clear that it believes North Korea should not be granted access to the SWIFT system. The U.S. government considers North Korea to be a serious threat to global financial stability, and its leadership has repeatedly called on the international community to enforce stringent economic sanctions against the country, in an effort to force it to abandon its nuclear weapons program.
Given the current political climate, it remains highly unlikely that North Korea will be granted access to the SWIFT network anytime in the near future. To ensure that no money is funneled to the North Korean government, the U.S. Treasury has imposed stringent financial sanctions, including a ban on North Korean banks using the SWIFT system. Similarly, the U.N. Security Council has imposed stiff economic sanctions on North Korea, with a particular focus on limiting the country’s access to financial services.
Ultimately, it appears that North Korea’s lack of access to the SWIFT payment system is not simply due to a lack of modern technology. The country’s international isolation, due to political and economic sanctions imposed by the United States and the U.N., means that it is extremely unlikely that North Korea will gain access to the global financial system anytime soon.
Alternative Payment System
In place of the SWIFT system, North Korea relies on more primitive forms of payment to purchase needed goods from foreign countries. Cash payments are a common form of payment, and usually take the form of euros, Chinese yuan, or even U.S. dollars. This is due to the fact that the U.S. dollar is the world’s most widely-accepted currency, and it is fairly easy to convert these payments into the currency of choice.
In addition to cash, North Korea also uses inter-bank transfers, which involve an intermediary bank transferring money between two banks in different countries. This is a much slower and more expensive form of payment than using the SWIFT system, but since North Korea lacks access to that technology, it is currently their only option.
It is also possible that North Korea is using cryptocurrencies, such as bitcoin, to bypass international sanctions. Cryptocurrencies are decentralized digital currencies that allow payments to be sent and received without government or bank oversight. North Korea has been accused of using bitcoin and other cryptocurrencies to bypass economic sanctions and finance its nuclear weapons program.
However, it is unclear how much of an impact cryptocurrencies are having on the North Korean economy. It is possible that North Korea is using cryptocurrencies as a way to pay for goods and services, but the exact extent of their use is unknown.
Long-term Effects
The lack of access to the SWIFT system is having a devastating effect on the North Korean economy. The inability to make large payments quickly and securely means that North Korea is struggling to purchase foreign goods. This has led to food and fuel shortages, and has contributed to the country’s widening inequality gap.
The lack of access to the SWIFT system also makes it difficult for North Korean businesses to conduct international trade. For example, North Korean businesses that export goods to China must make the payments manually, or use other less efficient payment methods. The lack of access to the SWIFT system is making it difficult for North Korean businesses to compete in the global marketplace.
Finally, the lack of access to the SWIFT system may also have an impact on international politics. Without access to the SWIFT system, North Korea is unable to participate in the global economy, and is therefore isolated from much of the world. This may explain why North Korea has become increasingly isolated, and why it has become a source of tension and instability in the region.
International Conflicts
The lack of access to the SWIFT system also has implications for international conflicts. The inability to transfer money quickly and securely means that nations are unable to finance their own proxy wars, or provide aid to allies in times of need. This is particularly true in the case of North Korea, which has been involved in a decades-long conflict with South Korea.
The lack of access to the SWIFT system also makes it difficult for North Korea to make payments for imports, particularly those from China. The fact that payments must be made in cash or other inefficient forms makes it difficult for North Korea to purchase much-needed goods and services.
Finally, the lack of access to the SWIFT system may also have an impact on arms sales. Without access to the SWIFT system, North Korea is unable to transfer money to purchase weapons. This means that North Korea must rely on more primitive forms of payment, such as cash or barter, to purchase weapons and military equipment.
Conclusion
In conclusion, North Korea does not currently have access to the SWIFT payment system, and is unlikely to gain access to it in the near future. As a result, North Korea is forced to rely on more primitive forms of payment, such as cash or inter-bank transfers, in order to pay for goods and services. The lack of access to the SWIFT system is having a significant impact on the North Korean economy, as well as its ability to finance conflicts and purchase imports.
