While the vast majority of the world's countries are jockeying around Iran, instex was established with the support of Europe's Britain, France, and Germany, and this settlement mechanism is being used to resist the U.S. swift system, so it's being pinned with great hopes.
What does instex mean?
Instex is a barter settlement mechanism to help Iran evade US sanctions, and in simple terms the system is designed to resist the swift system. In the beginning, international trade was controlled by swift, so the United States can use its control to monitor the flow of funds around the world and make sanctions, so Germany, France and Britain were forced to set up instex to maintain their own and Iran's continued transactions, to protect their own rights and interests.
According to current rules, the instex settlement mechanism involves Iran's livelihood in the humanitarian field, such as medicines, medical equipment and agricultural products. This system is in fact a very simple principle, is a set of barter trade settlement system between the EU and Iran.
How does this system work? That is to first count which EU companies want to import goods from Iran, which EU companies want to export goods to Iran, put the amount in euros to calculate, through the coordination of this system, those who want to import Iranian goods EU companies to pay the money to those who want to export goods to Iran's EU companies, and similarly, on the Iranian side of the operation is the same.
Through this model, the two sides actually have no money circulating in the transaction, which is equivalent to a currency swap, and what moves is only the goods on the market. In theory, this system can protect EU companies to avoid U.S. sanctions, and allow both sides to complete the transaction.