It is usually cited within the press that $10 trillion of economic transactions stream over submarine cables each day. However is it true?
To correctly deal with this declare, we have to check two issues.
1. Do monetary establishments typically 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 number 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 similar 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 typical 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 improve. So if the worth per message stayed the identical, that suggests $22.4 trillion a day.
Even when the typical transaction worth on SWIFT has fallen, the mix of SWIFT plus different monetary networks’ every day volumes would put us over the $10 trillion mark.
So I feel we are able to go forward and safely name this fantasy true.
When researching this fantasy, I used to be interested by how a lot $10 trillion actually is. This is my try to put it into perspective.
Alan Mauldin and I tackled this fantasy and 5 others throughout our presentation at SubOptic 2023. Obtain our slides for the total breakdown.
