How BIC SWIFT codes determine Venezuela's banking reality

At the heart of the international financial system lies a silent but fundamental infrastructure: the global banking messaging network. While many assume that money is “sent” directly between banks, the reality is more complex. The system that makes this communication possible is SWIFT, and the BIC SWIFT codes that identify each financial institution are what enable these transactions to occur. For Venezuela, understanding this mechanism is key to grasping why access to international banking has become so difficult.

Understanding BIC SWIFT: The global messaging infrastructure

SWIFT, short for Society for Worldwide Interbank Financial Telecommunication, is the most important communication network in the global financial system. It connects over 11,000 financial institutions in more than 200 countries, but it’s essential to clarify what it actually does.

Each bank connected to SWIFT receives a unique identification code called BIC (Bank Identifier Code), also known as a SWIFT code. This code is not just a label: it’s the “passport” that allows an institution to be unequivocally identified in the global financial system. Without it, international transactions would be chaotic.

It’s important to understand what SWIFT IS NOT. It does not hold money, settle transactions, or act as an intermediary of funds. Its function is purely communicative: it transmits standardized and secure messages instructing intermediary banks on what to do with the funds. When Bank A wants to send $1,000 to client X through Bank B, SWIFT simply communicates that intention in a verifiable and permanent way.

Why Venezuela was excluded from the BIC SWIFT system

The relationship between BIC SWIFT codes and Venezuelan banking illustrates how political and economic decisions can disconnect an entire country from the international financial infrastructure. Since 2019, with the imposition of U.S. sanctions, the landscape changed drastically.

The Central Bank of Venezuela and state banking institutions like Banco de Venezuela and Bicentenario faced severe restrictions to maintain their presence in the SWIFT network. This was not a technical disconnection but a gradual isolation that virtually cut off much of Venezuela’s public banking sector from the global financial system.

For a Venezuelan bank to use SWIFT and its BIC code, it needs to maintain a relationship with a correspondent bank, usually located in the United States or Europe. These intermediaries act as financial bridges. However, many international institutions have abandoned these relationships out of fear of indirect sanctions, a phenomenon known as “over-compliance.” This chain of cutoffs has made executing an international transfer from Venezuela enormously complicated, slow, and costly due to interbank fees accumulating at each step.

Venezuelan private banks that still have access to SWIFT operate under extreme scrutiny. If you try to receive an international transfer, the bank will likely require exhaustive documentation to justify the origin of the funds. This situation has created an administrative bottleneck that discourages international operations.

Emerging alternatives beyond the SWIFT code

Faced with limitations operating within the BIC SWIFT system, Venezuela has explored alternative routes. Some banks and the government have investigated connections with systems like SPFS (Russia) and CIPS (China), though with limited results.

The most significant development has been the rise of crypto assets. Stablecoins like USDT have become a way to bypass traditional SWIFT procedures. Companies and citizens use these digital currencies to make international payments without relying on conventional banking infrastructure. Additionally, transfer methods like Zelle and custody accounts in internal currencies that avoid passing through regulated international channels have gained popularity.

The current situation: limitations and opportunities

The Venezuelan banking landscape remains complex despite recent political changes. Public banks remain mostly disconnected or under severe restrictions. Private banks operate, but with a limited number of correspondent banks available. Fees remain very high, and transfer times that once took 24 hours now can take days or weeks.

The BIC SWIFT code continues to be the global standard for identifying financial institutions, but in Venezuela, its practical utility has been compromised by financial blockades. This reality has accelerated the search for alternative solutions, including blockchain and crypto assets, which operate independently of these geographic and political limitations. For many Venezuelans and businesses, this has been the only way to maintain financial connectivity with the world.