Do $10 Trillion of Monetary Transactions Circulation Over Submarine Cables Every Day?

Do $10 Trillion of Monetary Transactions Circulation Over Submarine Cables Every Day?

It is usually cited within the press that $10 trillion of monetary transactions circulate over submarine cables day by day. However is it true?

To correctly sort out this declare, we have to take a look at two issues.

1. Do monetary establishments usually use submarine cables for transactions?

The quick reply is sure. Sadly, I am unable to get too particular right here as a result of a variety of TeleGeography’s knowledge on this subject relies on confidential interviews with banks and monetary establishments.

However belief me on this, most monetary establishments are utilizing submarine cables identical to everybody else.

2. Are there $10 trillion per day globally in monetary transactions?

This is the trickier half: calculating the quantity per day in worldwide monetary transactions.

Let’s study SWIFT transactions for example. SWIFT is the worldwide community on which cross-border funds are initiated; the precise funds themselves are executed on totally separate networks.

In 2004, SWIFT cited 10 million messages a day and the common worth per message was about $500k. This got here out to about $5 trillion a day.

A couple of months in the past, SWIFT cited virtually 45 million messages a day, a 4.5x enhance. So if the worth per message stayed the identical, that means $22.4 trillion a day.

Even when the common transaction worth on SWIFT has fallen, the mix of SWIFT plus different monetary networks’ day by day volumes would put us over the $10 trillion mark.

So I feel we will go forward and safely name this fable true.

SubOptic Myth 1When researching this fable, I used to be inquisitive about how a lot $10 trillion actually is. This is my try and put it into perspective.

Alan Mauldin and I tackled this fable and 4 others throughout our presentation at SubOptic 2023.
Obtain our slides for the total breakdown.