OPINION:
The U.S. dollar is the dominant currency for global trade. That simple fact puts the United States in a particularly powerful position to use economic sanctions to influence the actions of nations all over the world.
Conversely, because of the USD’s role as the planet’s primary currency, it is nearly impossible for other countries to restrict American activity in the international banking system without running the risk of doing serious harm to their own economies in the process.
The Department of the Treasury has the Office of Foreign Assets Control (OFAC), which is tasked with imposing financial sanctions worldwide against nations or individuals that America deems to be “bad guys.” Among the tools OFAC has at its disposal is the ability to freeze assets, to block transactions involving the dollar and to sever activity between the international financial markets and certain foreign financial institutions, governments and individuals.
Last week, OFAC took action against multiple networks spanning several countries for enabling Iran’s banking system and financial networks to move hundreds of millions of dollars. These networks allow Iran’s armed forces — including the Islamic Revolutionary Guard Corps (IRGC) — to access the international financial system to receive payment for illicit oil sales, to purchase sensitive components for missiles and other weapons systems, and to transfer money to Iran’s terrorist proxies.
Treasury Secretary Scott Bessent offered his reasoning for the action: “Every facilitator that keeps the regime afloat is putting a target on its own back. Treasury will continue to expose these networks and cut them off from the U.S. financial system.”
The United States has used similar economic pressure to punish adversaries such as North Korea and Cuba. Along with Iran, those countries are essentially under total financial blockades, prohibiting virtually all investments, transactions and trade.
If you are cheering for America, all of this may sound good to you.
The U.S. has a wide net of economic bans in Russia against major financial institutions, both government-owned and private, including restrictions on central bank reserves and a prohibition from the international banking-communications network.
Again, this appears to skew heavily in favor of America, but is it possible that the heavy-handed economic tactics could come back to bite the U.S.?
It’s no secret that in the last few decades a number of governmental bodies have tried to establish an alternative to the USD being the world’s currency. China has made no bones about its desire to replace the dollar with the Chinese yuan. With its ever-expanding global economic reach, particularly in manufacturing, China might seem to be a formidable threat, but because the U.S. is one of its primary customers, China is hamstrung in its ability to push the issue.
The euro has certainly made trade within Europe much easier, but has never been a real threat to bumping the USD as the currency of choice.
It is possible, however, that the United States has overplayed its hand, forcing resourceful folks around the globe to come up with an alternative way to move funds across borders.
In a recent interview with the BBC, Petr Fradkov, chairman and CEO of Russia’s PSB Bank, framed the U.S. use of economic sanctions as “a tool of new warfare.”
Mr. Fradkov, whose state-owned bank’s primary focus is to service and finance the Russian defense industry, said moving away from the USD is a goal that is already happening incrementally. He pointed out that many countries are trying to use their own national currency in all payments now.
The bigger threat to the USD, however, may be the A7 cross-border payment system.
He said that the current international payment infrastructure “is beginning to be replaced by a list of national systems. The world is moving in this direction regardless of the Russian situation: if in May 2020 only 35 countries were studying or developing central bank digital currencies, now there are already 146.”
According to Reuters news agency, he explained that “Russia needs to create its own payment framework — domestic in origin but international in function. We have plenty of both technical solutions and financial capabilities. PSB, together with the A7 cross-border payment system, is developing one of these projects for a new payment architecture where payment does not depend on the approval of a third party.”
That last line is essential — “does not depend on the approval of a third party.”
The Russians are working to use the cryptocurrency stablecoin to create an infrastructure that will let it trade with international partners everywhere without the United States being able to impose economic penalties. Is it realistic to think cryptocurrency can challenge the USD?
The current Society for Worldwide Interbank Financial Telecommunication system (SWIFT) is what the traditional banking industry uses to transfer funds internationally. According to PSB, annual flow in SWIFT is about $150 trillion. In 2025, the volume of stablecoins reached $33 trillion, which was a 72% increase over the previous year. To take that one step further, Visa’s transaction volume for the same year was $16.7 trillion. Cryptocurrency clearly is a very real part of the global economy.
The rub is that an overwhelming portion of the worldwide stablecoin infrastructure is ultimately still tied to the USD. However, Mr. Fradkov says it is only a matter of time before that changes.
“It is precisely the settlements not tied to USDT that represent the segment of the market that will grow and may eventually become a real alternative to the established Western infrastructure,” he said, adding that Russia “consciously chose this niche to build our own infrastructure, unlike other payment agents.”
He acknowledged outside factors jump-started their efforts: “I won’t hide the fact that the trigger was the restrictions we faced in 2022. The financial restrictions turned out to be the most severe among all imposed limitations.”
The Russian executive wanted to assure readers this isn’t merely an effort to dodge sanctions. “I reiterate, this is not merely a matter of sanctions and restrictions; it is genuinely a matter of a new market that is developing very, very rapidly.”
PSB Bank claims to be working closely with many countries in Africa and Asia. Specifically singled out is Nigeria, one of the largest economies on the African continent and home to 250 million people. There are several African nations that don’t even have a central bank, making them a prime target for the new technology.
The idea is that the A7 tools PSB is developing would be used for transactions between two countries with no one else involved. Theoretically at least, that means no records to the rest of the world and no way for Western countries to interfere in the process.
The response of international regulators to A7’s own settlement infrastructure is telling: A7 has already been included in the EU sanctions lists as an independent infrastructure project. The Russian bank says that when A7 started operating, it vowed not to be afraid of falling under sanctions. When The Financial Times wrote about A7, the publication called it a good working tool for settlements.
Russia is not alone in trying to develop cryptocurrency alternatives, of course. Financial centers such as Dubai or Singapore are on similar tracks, though those two may be ahead of Moscow in their development.
The crypto markets are the wild, wild west in some ways, as regulations are still being developed. The potential for clean, efficient transactions is obvious.
Less clear is the long-term impact on the USD and on the soft power wielded by America through its traditional dominance of global financial markets. That ground may be shifting, and if so, it will be a seismic shift.
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