SWIFT is generally reserved for international transfers. In the United States domestic bank transfers use ACH which involves FTPing fixed-width-column EDI files to and from the Federal Reserve every night. ZenPayroll had a really good series on how it all works a few months ago:
... for more background, SWIFT is an essentially global monopoly on international interbank transfers with all messages recorded in full by the US and its allies[1]. Despite claiming they only send messages, in effect money is moved and there are documented cases of it being seized off the wire by the US even in EU<->EU state transactions. It opened its first 'international center of operations' in Virgina (~CIA HQ) as a first order of business after accruing partaking institutions at a speed frankly unbelievable given the technology of the time. It was billed as a telex replacement.[2] After recently dispatching with its carefully developed apolitical facade and banning Iran (after receiving Europe's blessings at the behest of UANI, which is essentially Mossad + CIA old guard[3]), it pissed off India (who depend on them for energy security) and raised eyebrows in Russia and China.
While it's probably critical for the future of humanity for a project like this to succeed, frankly anything that leaves the trust and reputation aspects to manual negotiation as per conventional business is just lipstick on a pig. In this sense, Bitcoin is superior. For some more ambitious ideas forming in this area check out http://ifex-project.org/
Before SWIFT moved to SwiftNet they used X.25, before that they used telex. Of course there was plenty of overlap during the transition, as far as I know X.25 for financial institutions is now all but dead, maybe there are still some ATMs connected to ISDN lines (X.25 packets can be sent via either one of the 'B' channels up to 64 kbps or via the 'D' channel at 16 kbps) but those are not part of SWIFT anyway but of a banks local IT infrastructure.
Thanks for a well written description and background of SWIFT, I think it is accurate.
I have a question on this paragraph:
>While it's probably critical for the future of humanity for a project like this to succeed, frankly anything that leaves the trust and reputation aspects to manual negotiation as per conventional business is just lipstick on a pig. In this sense, Bitcoin is superior. For some more ambitious ideas forming in this area check out http://ifex-project.org/
Does "for a project like this" refer to SWIFT or BankAPI? If SWIFT, then I understand. But if BankAPI, then you have misunderstood, because it does not "leaves the trust and reputation aspects to manual negotiation", since it's decentralized and peer-to-peer (or in this context bank-to-bank), just like a lot of other successful peer-to-peer technologies of which you mentioned one.
What I meant by "a project like this" was a concrete, functional alternative to existing status-quo systems, with SWIFT as the implied primary target for forced deprecation.
I think banking is an artificial industry, one that doesn't really have to exist. I believe that money that is state issued, electronically issued, trust that can be quantified, reputation and physical goods are all equally valid assets for forward-looking exchange protocols. I believe that any distinction between participants is farcical and that risk management models, encryption preferences, topology specification and other qualitative decisions regarding deployment must be left out of scope.
To clarify my original comment further, I do think that BankAPI, just at a glance, is probably focusing too much on the conventional world of banking rather than looking at the big picture ... which has nothing to do with banks and everything to do with a potential revolution in the way we organize society, removing anachronistic middle men and vested interests who consistently fail to demonstrate any meaningful reason for being while extracting vast quantities of wealth from society at large and encouraging the continuation of a socio-political and economic trajectory that will see our environment destroyed within a generation.
> Despite claiming they only send messages, in effect money is moved and there are documented cases of it being seized off the wire by the US even in EU<->EU state transactions.
The ability of the US to seize USD transaction has nothing to do with any control they might have over SWIFT. All USD transfers -- even USD transfers between two EU citizens -- hapen via a US bank, because only US banks can have a USD balance.
There are USD balances right across the world. Some of them are backed with cash (really!). That's fundamentally because, unlike bitcoin or company shares, currency is what's known as a 'non-consolidated' asset: ie. there is no central ledger anywhere in the world with a complete list of who owns every piece of currency on issue, like exists for Bitcoin on the blockchain.
The total balance of electronic currency in a commercial bank is tracked by the central bank of the currency in question (eg. the Federal Reserve for USD for the US, Danmarks Nationalbank for DKK in Denmark).
The Federal Reserve is the authority on the (electronic) USD balance of each US bank, and no non-US banks can have a USD balance (this happens via so-called intermediate banks where, for example, a Danish bank has a USD balance with a US "intermediate" bank).
Intrabank transfers (transfers from one account at a bank to another account in the same bank) is simply a change in that bank's local database. Interbank transfers (a transfer from one commercial bank to another) within the same country is handled by the central bank (since the central bank is the authority on the commercial bank balance of the currency they produce/manage).
[1] http://en.wikipedia.org/wiki/SWIFT_message_types