He eke , Ca s en
A icle
Financial sanc ions and he US-dolla
Vie eljah eshe e zu A bei s- und Wi scha s o schung (VAW)
P o ided in Coope a ion wi h:
Ins i u A bei und Wi scha (IAW), Uni e si ä B emen / A bei nehme kamme B emen
Sugges ed Ci a ion: He eke , Ca s en (2025) : Financial sanc ions and he US-dolla , Vie eljah eshe e
zu A bei s- und Wi scha s o schung (VAW), ISSN 2942-1470, Duncke & Humblo , Be lin, Vol. 2,
Iss. 2, pp. 197-212,
h ps://doi.o g/10.3790/ aw.2025.1457704
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Duncke & Humblo · Be lin
Financial Sanc ions and he US-Dolla
By Ca s en He eke *
Summa y
The pape discusses whe he US dolla based inancial sanc ions will unde mine he
dolla ’s dominan in e na ional ole. Despi e long-s anding a emp s o educe he ole o
he dolla , hese ha e had limi ed success so a . I discuss why his is he case and why al-
e na i es o he dolla a e unlikely o challenge i s posi ion a p esen . Howe e , a ac-
ionaliza ion o he global inancial sys em may happen in he longe un. An impo an
s ep o a oid such a ac ionaliza ion will be o make he use o inancial sanc ions less
unila e al and a bi a y.
Zusammen assung
De Au sa z disku ie , ob Finanzsank ionen die in e na ionale Bedeu ung des US-
Dolla s schwächen we den. Obwohl es sei länge em Ve suche gib , den Ein luss des Dol-
la s zu e inge n, sind diese bislang wei gehend e olglos geblieben. Es wi d besch ieben,
wa um dies de Fall is und wa um es auch au absehba e Zei so bleiben wi d. Lang is ig
kann es alle dings du chaus zu eine F agmen ie ung des globalen Wäh ungs- und Fi-
nanzsys ems kommen. Um eine F agmen ie ung zu e hinde n, soll en Finanzsank io-
nen kün ig s ä ke koo dinie und wenige einsei ig und a bi ä e häng we den.
Keywo ds: Financial sanc ions, in e na ional inancial sys em, dolla , enminbi
JEL classi ica ion: F2, F3, F5, G2
1. In oduc ion
The swi and comp ehensi e eac ion o Eu ope and he Uni ed S a es o he
Russian a ack on Uk aine in Feb ua y 2022 su p ised mos obse e s. I ook
only a ew days o impose he i s o a se ies o sanc ion p og ams ( eaching 14
a he ime o w i ing) on Russia, which had been coo dina ed and p epa ed in
ad ance among he Uni ed S a es, he Eu opean Union, he Uni ed Kingdom,
* Ca s en He eke , Depa men o Economics, Uni e si y o Siegen, Un e es
Schloss3, 57072 Siegen, Ge many, email: ca s en.he ek[email p o ec ed]
I am g a e ul o he anonymous e e ees o help ul and cons uc i e commen s and
sugges ions.
Vie eljah eshe e zu A bei s- und Wi scha s o schung 2 (2025) 2: 197 – 212
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198 Ca s en He eke
Vie eljah eshe e zu A bei s- und Wi scha s o schung, 2 (2025) 2
Japan, Canada, Swi ze land and Aus alia (Bake 2024). They a ge ed a ound
eigh een- housand indi iduals and i ms, eezing and con isca ing hei asse s,
banning echnology expo s and ce ain impo s, and pu a (la gely ine ec i e)
p ice ceiling on Russia’s oil expo s. The alliance also decided o eeze Russian
cu ency ese es and cen al bank asse s in he amoun o 300 billion US dol-
la s, abou hal o he Russian cen al bank’s o al cu ency ese es o 630 bil-
lion.
Gi en he size and in e na ional impo ance o he Russian economy, he ex-
en o sanc ions is excep ional in mode n imes and goes u he han sanc ions
ollowing he occupa ion o C imea in 2014, when he eac ion was less uni ed
and comp ehensi e.1 I also in ensi ied an ongoing deba e abou he long- e m
consequences o inancial sanc ions o he in e na ional inancial sys em (De-
ma ais 2022; Weiss 2022). While inancial sanc ions in gene al a e no hing new,
he seizu e o cen al bank asse s is di e en . I cu ency ese es, which we e so
a conside ed immune o sanc ions, a e seized, coun ies a ound he wo ld
migh econside o con inue using he US dolla . Using cu encies no aligned
wi h he Wes e n coali ion agains Russia would make hem less exposed o be
sanc ioned in u u e con lic s.
The inancial sanc ions a e a eminde o how a - eaching he powe o he
Uni ed S a es is in obs uc ing o he coun ies’ use o he US dolla . Russia and
China had al eady ea lie begun di e si ying away om using he dolla as a e-
se e cu ency o educe hei ulne abili y and looking o al e na i es o he
US-dolla be o e he ecen sanc ions (McDowell 2023). The discussion has,
howe e , in ensi ied and become pa o a b oade discussion abou “ agmen-
a ion” be ween economic blocs in ade policy, indus ial policy and access o
c i ical echnology and esou ces. The In e na ional Mone a y Fund, o in-
s ance, wa ns o such a agmen a ion and e en d aws compa isons o he Cold
Wa (Aiya e al. 2023; Ca alán e al. 2024; Gopina h e al. 2024).
The p esen pape asks wha he consequences o inancial sanc ions o he
global inancial sys em will be. I begins by discussing he impo ance o he US
dolla o in e na ional inancial ansac ions and whe he he inc easing use o
inancial sanc ions may unde mine he dolla ’s ole. Despi e long-s anding a -
emp s o many coun ies, including Ame ican allies, o educe he dominan
ole o he dolla , hese ha e had only limi ed success so a . I he e o e discuss
nex why his is he case and why al e na i es o he dolla will no challenge he
dolla soon. Howe e , his does no p eclude ha , going hand in hand wi h a
1 Sanc ions imposed on I an a e simila ly comp ehensi e bu a ge a smalle econo-
my less in eg a ed in o he wo ld economy han Russia. I an accoun s o less han
onepe cen o wo ld GDP, Russia o abou h eepe cen (K ahnke e al. 2024). Fo a
comp ehensi e accoun o he design and implemen a ion o sanc ions agains Russia
since 2014, see Bake (2024).
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Financial Sanc ions and he US-Dolla 199
Vie eljah eshe e zu A bei s- und Wi scha s o schung, 2 (2025) 2
ac ionaliza ion o he ading sys em, a ac ionaliza ion o he global inancial
sys em may happen in he longe un. In conclusion, I discuss possible ways o
a oid such a ac ionaliza ion. An impo an s ep will be o make he use o i-
nancial sanc ions less unila e al and a bi a y. A egula o y amewo k ha con-
di ions he use and scope o pe missible inancial sanc ions, o a leas s onge
coo dina ion be ween coun ies, could lowe incen i es o educe he use o he
dolla , which is ul ima ely also in he in e es o he Uni ed S a es.
2. The Use o Financial Sanc ions
Imposing sanc ions and emba goes agains he ade o indi idual coun ies is
a s anda d policy measu e in in e na ional con lic s and wa s (Blackwell and
Ha is 2016; Felbe may e al. 2020; K ahnke e al. 2024; Mulde 2022). Block-
ing ade obs uc s access o impo an goods and, e en i sanc ions a e no wa-
e igh , hey inc ease cos s. O e ime, howe e , sanc ions and emba goes be-
come po ous and lose e ec i eness. This can also be seen wi h ade sanc ions
agains Russia whe e s a es like China, Tu key o Kazakhs an ei he di ec ly o
h ough e-expo s p o ide access o all kinds o goods, including weapons and
echnologies needed o wa ela ed pu poses (Hilgens ock e al. 2024).
Gi en he highe cen aliza ion o he in e na ional inancial sys em, howe e ,
i is mo e di icul o bypass inancial sanc ions. Financial sanc ions a e mo e
e ec i e due o he dominan ole o he US dolla in in e na ional inancial
ansac ions, which gi es he Uni ed S a es unique powe o punishing enemies,
and some imes iends, ha i does no ha e wi h o he o ms o sanc ions. Since
Sep embe 11, 2001, he Uni ed S a es and i s allies make abundan and inc eas-
ing use o unila e al and mul ila e al inancial sanc ions agains coun ies such
as I an, A ghanis an, Bu ma, Libya, Sy ia o Venezuela (see Cip iani e al. 2022;
K ahnke e al. 2024).2 While less o en used, he e ha e also been cases o cen al
bank asse eezes in Sy ia, I an and A ghanis an be o e hose imposed on Rus-
sia. K ahnke e al. (2024) epo en cases o asse eezes o he 2000s alone.
The dominan ole o he US dolla becomes appa en i s in he ac ha i is
used in abou 90pe cen o all o eign exchange ansac ions.3 Mo eo e , a ound
50pe cen o in e na ional loans and mo e han 60pe cen o in e na ional deb
a e denomina ed in dolla s.4 The dolla makes up nea ly 60pe cen o o icially
2 The Uni ed S a es O ice o Fo eign Asse s Con ol (OFAC) p o ides de ails o each
case. See h ps://home. easu y.go /policy-issues/o ice-o - o eign-asse s-con ol-sanc
ions-p og ams-and-in o ma ion.
3 Ou o a o al o 200pe cen since each ansac ion in ol es wo coun ies.
4 The impo ance o he dolla may be e en la ge han shown in s a is ics because o
“FX swaps”, o wa d ansac ions wi h dolla s ha can c ea e undocumen ed dolla obli-
ga ions. Es ima es o hese swaps un up o 39 illion US-dolla s (Bo io e al. 2022).
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200 Ca s en He eke
Vie eljah eshe e zu A bei s- und Wi scha s o schung, 2 (2025) 2
decla ed in e na ional cu ency ese es (ECB 2024), down om a ound 70pe -
cen wen y yea s ago as he IMF’s Cu ency Composi ion o O icial Fo eign
Exchange Rese es (COFER) da abase shows.5
Conce ning he composi ion o cu ency ese es, Lase e al. (2024) de elop
a new da ase , based on o icial da a and na ional cen al bank epo s. They
show ha o e he las i e yea s he dolla ’s sha e has d opped in Eu ope, Sou h
Ame ica and Asia, bu inc eased in A ica, Aus alia and Oceania. The enmin-
bi’s sha e in con as has isen in all egions wi h excep ion o he eu ozone.
Non adi ional ese e cu encies like he Aus alian and Canadian dolla s and
cu encies collec ed in he “o he cu encies” ca ego y inc eased in all egions
o he han Aus alia and Oceania, hin ing a a g adual educ ion o he impo -
ance o dolla and eu o (see also A slanalap e al. 2022). Recen p ess epo s,
in con as , sugges ha cen al banks a e ac ually planning o inc ease hei
dolla ese es, pa icula ly in Asia (McDougall 2024). This is in line wi h Gold-
be g and Hannaoui (2024) who show a signi ican educ ion o Russian and
Chinese holdings o he dolla bu do no see his as a gene al phenomenon. In
hei iew, he decline in dolla sha es can be mainly a ibu ed o a s ong in-
c ease in o e all ese es (mainly by Swi ze land) no denomina ed in dolla s.
While he exac composi ion o cu ency ese es may be dispu ed, i is no
dispu ed ha cen al banks ha e inc eased hei gold ese es in ecen yea s so
ha gold makes up abou enpe cen o o al ese e holdings now. While gold
pu chases ha e been 400 and 600 ons o e he 2010s, in 2022 and 2023 hey
jumped o o e 1000 ons, wi h China alone inc easing i s gold holdings by
225 ons (ECB 2024). Bu e en as cen al banks di e si y hei ese e holdings,
he dolla ’s dominan ole in cu ency ese es emains.
The second ac o ha gi es he Uni ed S a es unique powe is i s con ol o e
he global inancial in as uc u e. In e na ional inancial lows usually consis s
o wo pa s: he e is i s a no i ica ion be ween banks ha a paymen will ol-
low, be o e in a second s ep he ac ual execu ion o he paymen akes place.
Communica ion be ween banks mos ly akes place ia he Socie y o Wo ld-
wide In e bank Financial Telecommunica ion (SWIFT) loca ed in Belgium. Be-
o e he c ea ion o SWIFT by p i a e banks in 1973, banks no i ied each o he
by Telephone o Fax and so he c ea ion o he ne wo k has educed ansac ion
cos s and made e i iabili y much easie . Because SWIFT is no based in he
Uni ed S a es, i is no subjec o Ame ican legal o e sigh . Bu h ea ening
SWIFT wi h losing access o he Uni ed S a es inancial ne wo k has been
enough in he pas o o ce he o ganiza ion o implemen also unila e al sanc-
ions o he US go e nmen . In he case o I an, o ins ance, he o ganiza ion
decided o exclude I anian banks om he ne wo k wi hou a o mal Eu opean
5 See h ps://be ada a.im .o g/Da ase s/COFER.
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Financial Sanc ions and he US-Dolla 201
Vie eljah eshe e zu A bei s- und Wi scha s o schung, 2 (2025) 2
legal equi emen , based on he me e h ea o US sanc ions (Cip iani e al.
2023).
While exchanging in o ma ion is possible wi hou using SWIFT, he ac ual
execu ion o a signi ican paymen in ol ing dolla s needs an Ame ican bank.
Clea ing o dolla paymen s among banks akes place h ough he Clea ing
House In e bank Paymen Sys ems (CHIPS), c ea ed by p i a e banks in 1970.
Today i comp ises abou 50 Ame ican banks o US b anches o o eign banks,
including Chinese (bu no Russian) banks. CHIPS di ec ly clea s paymen s
among membe banks o on behal o hi d banks ha ha e access o membe
banks. Paymen s a e ne ed once a day, and unds a CHIPS a e p e unded by
pa icipa ing banks h ough Fedwi e, he Fede al Rese e Bank’s g oss-se le-
men sys em, o ans e money om hei Fed accoun s o CHIPS.
Consequen ly, banks ha a e pa o an in e na ional inancial ansac ions in
dolla s ei he need o be a di ec membe o CHIPS o use a co esponden
bank ha ans e s dolla s o he ecei ing bank o i s pa ne bank. An Ame i-
can bank wishing o ans e money o a o eign indi idual will i s ans e he
paymen o a domes ic bank pa icipa ing in CHIPS which hen ans e s i o
he CHIPS accoun o a o eign bank. The la e hen ans e s he paymen o
i s cus ome ab oad o ano he bank loca ed in he espec i e coun y. The US
go e nmen can o bid Ame ican banks o in e ac wi h ce ain o eign banks
and a bank excluded om CHIPS has no longe access o he clea ing sys em
and he necessa y dolla unds o a ansac ion. The same applies o simila
clea ing ne wo ks in o he coun ies such as he Clea ing House Au oma ed
Paymen Sys em (CHAPS) in he Uni ed Kingdom o he paymen sys ems op-
e a ed by he Eu opean Banking Associa ion in he Eu opean Union (EBA
Clea ing). While banks migh ind ways a ound SWIFT by using less e icien
echnologies, i is much mo e di icul o wo k a ound clea ing sys ems.
E en i banks would conside doing ansac ion wi h dolla unds loca ed in
o sho e ma ke s such as Singapo e o Hong Kong, he h ea o exclusion om
he ne wo k agains indi idual banks o coun ies has so a been enough o
making hem comply. The h ea o seconda y sanc ions is legally con es ed, bu
i can be e y powe ul ne e heless. The Uni ed S a es o en ex ends sanc ions
o all paymen s which a e somehow connec ed o a sanc ioned en i y o indi id-
ual. A co esponden bank may no be in ol ed di ec ly in a sanc ioned pay-
men bu as long as i needs dolla s o e inance i sel , his exposes i o sanc-
ions and he e o e o sho e ma ke s a e no ou side seconda y sanc ions. This
ex ension o sanc ion each is conside ed “unlaw ul” and c i icized as ex a e i-
o ial ju isdic ion no only by oes bu iends o he Uni ed S a es as well (Em-
menegge and Zube 2022).
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202 Ca s en He eke
Vie eljah eshe e zu A bei s- und Wi scha s o schung, 2 (2025) 2
3. Reducing Vulne abili y
Gi en hei exposu e o dolla sanc ions, se e al coun ies ha e ied o e-
duce hei ulne abili y. S a ing wi h he occupa ion o C imea in 2014 his is
mos ob ious in Russia and China, bu he e a e also longe -s anding a emp s
by oil and gas p oducing A ab s a es o mo e away om denomina ing ene gy
in dolla s. E en allies o he Uni ed S a es, like he Eu opean Union, ha e de-
cla ed hei in en ion o educe he ole o he dolla and hei exposu e o uni-
la e al sanc ions by se ing up an al e na i e sys em.
Be o e he in asion o Uk aine, close o 80pe cen o Russia’s impo s we e
in oiced in dolla s o eu os, bu a e he in asion o Uk aine i s impo s be-
came inc easingly in oiced in enminbi. By he end o 2022, enminbi paymen s
accoun ed o 20pe cen o Russia’s impo s, up om 3pe cen a yea ea lie ,
while he sha e o dolla and eu o declined o less han 70pe cen . Pa ly his
e lec s mo e ade wi h China and o he non-sanc ioning coun ies. Renminbi
in oices o impo s om China inc eased om 23 o 63pe cen be ween 2021
and 2022 and in ade wi h hi d coun ies he sha e o enminbi inc eased om
less han 1pe cen o mo e han 5pe cen du ing 2022 (Chupilkin e al. 2023).
Russia also es uc u ed i s cu ency ese e holdings. Following he i s
ound o sanc ions in 2014, he Russian cen al bank s a ed o con e pa o
i s ese es o gold and decla ed in 2022 ha i s en i e gold holdings had been
mo ed o Russia (Co se i e al. 2024). Russia does no disclose he composi ion
o i s cu ency ese es anymo e since he in asion o Uk aine, bu e en be o e
i had shi ed i s ese es away om he dolla , holding abou a hi d o hem in
enminbi (Eicheng een 2024). No expec ing ha cu ency ese es would be
ozen by Eu opean coun ies, howe e , i con inued o hold pa o i s ese es
in Eu ope which explains why almos hal o hem could be ozen. While Rus-
sia had educed he sha e o i s ese es down o 6.6pe cen in he Uni ed S a es
in 2021, i con inued o hold a ound 25pe cen in F ance, Ge many, he UK
and Aus ia (Kamminga 2023).
A e 2014 Russia also s a ed o de elop i s own inancial communica ion
sys em, he Sys em o T ans e o Financial Messages (SPFS), as an al e na i e
o SWIFT. Acco ding o Cip iani e al. (2023) mo e han 400 banks, mos ly
om Russia, bu also om Ge many, Swi ze land, F ance, Japan, Tu key, Swe-
den and Cuba, joined SPFS. As o Ap il 2022, banks om 52 coun ies we e
connec ed o he sys em, whose pa icipan s Russia no longe discloses. In 2021,
howe e , only abou 20pe cen o in a-Russian ans e s used SPFS.
China as well has aken s eps o p omo e he use o i s own cu ency ins ead
o he dolla . While his has been China’s s a egy o mo e han a decade now
(P asad 2014), i has accele a ed since he Russian in asion. China has conclud-
ed a numbe o clea ing ag eemen s wi h Pakis an, A gen ina and Saudi A abia
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Financial Sanc ions and he US-Dolla 203
Vie eljah eshe e zu A bei s- und Wi scha s o schung, 2 (2025) 2
since 2022. Mo eo e , new clea ing banks o enminbi paymen s ha e been es-
ablished in Laos, Kazakhs an, Pakis an, B azil and Se bia (Sandlund 2024).
The e ha e also been nego ia ions and ag eemen s wi h he Gul Coope a ion
Council coun ies (Bah ain, Kuwai , Oman, Qa a , Saudi A abia and he Uni ed
A ab Emi a es) o pay in enminbi o i s oil and gas impo s. Also, I aq and Bo-
li ia ag eed o se le hei ade wi h China in enminbi (Eicheng een 2024).
O e all, a ound 30pe cen o China’s ade in goods is now se led in i s own
cu ency, up om a ound 7pe cen in 2012 (ECB 2024). Despi e hese ini ia-
i es, howe e , he in e na ional ole o he enminbi is s ill a mino one. In la e
2023, only 2.4pe cen o o icial cu ency ese es we e held in enminbi and i
accoun ed o only 5.1pe cen o global ade paymen s and only 5pe cen o
cu ency u no e (Eicheng een 2024).
Gi en he impo ance o a clea ing sys em, and he ulne abili y o being ex-
cluded om i , he Chinese cen al bank, he People’s Bank o China, as well
launched i s own clea ing sys em in 2015, he C oss-Bo de In e bank Paymen
Sys em (CIPS). I is in p inciple o ganized simila ly o CHIPS bu wo ks as a
g oss-se lemen sys em as compa ed o a ne ing sys em like CHIPS. The e a e
also di ec pa icipan s and indi ec ones which go ia a membe bank loca ed
in China ( wo- i hs) and ab oad ( h ee- i hs). CIPS also has i s own messaging
sys em which banks use besides communica ing h ough SWIFT. In compa a-
i e size, howe e , CIPS is clea ly dwa ed by CHIPS. The la e has 11,000 pa -
icipa ing banks as compa ed o 1,300, i has 10 imes mo e ansac ions, and a
daily olume o close o 2 illion USD as compa ed o an equi alen o only
46billion (Eicheng een 2022). P esen ly, mos banks con inue o p e e SWIFT
o messaging because hey do no ha e access o a sepa a e CIPS e minal (Cip-
iani e al. 2023).
In Ap il 2022, Russian Minis e o Finance Siluano sugges ed linking he
Russian and Chinese paymen sys em and including o he BRICS membe s as
well (Eicheng een 2022).6 A he Oc obe 2024 BRICS mee ing in Kazan, Russia,
P esiden Pu in again p omo ed he idea o an own clea ing sys em o he o -
ganiza ion, called BRICS B idge, bu he esponse o o he membe s was no
en husias ic (Clo e and Mosolo a 2024). This is no su p ising: A clea ing sys-
em wi h noncon e ible, o only pa ly con e ible, cu encies is no a ac i e.
Cu en accoun su pluses wi h a coun y whose cu ency canno be used o pay
o impo s om o he sou ces a e no desi able and so membe s will aim a
balanced ade. Only he enminbi may be mo e widely accep ed as a means o
paymen because o China’s impo ance as a global expo e . Gi en he con ol
o China o e i s cu ency and he poli ical isk in ol ed, howe e , i is unlikely
6 Membe s o BRICS a e B azil, Russia, India, China and Sou h-A ica; Egyp , E hio-
pia, I an and he UAE joined his yea . The g oup has associa ion ag eemen s wi h
13s a es, and a ound 40 mo e coun ies ha e exp essed hei in en ion o joining.
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204 Ca s en He eke
Vie eljah eshe e zu A bei s- und Wi scha s o schung, 2 (2025) 2
ha BRICS membe s like India, Sou h A ica o B azil ha e a s ong incen i e
o swi ch om dolla o enminbi on a la ge scale, including hei cu ency e-
se es. P esen ly, i can he e o e no be expec ed ha a BRICS clea ing mecha-
nism will ind widesp ead suppo beyond Russia.
The e is also a long-s anding discussion abou he in en ion o Gul Coope a-
ion Council coun ies o mo e he denomina ion o oil ade away om he
dolla (Momani 2008). One ini ial eason behind he conside a ion was he
Ame ican in asion o I aq in 2003 and he ad ocacy o I an o mo e away om
he dolla in in e na ional oil ade. The eu o was ini ially seen as a possible al-
e na i e bu he eu o-c isis a e 2010 shel ed his plan. The e is now a new
discussion abou he possibili y o denomina ing a leas pa o oil ade in en-
minbi which is ac i ely p omo ed by China, and since 2018 enminbi denomi-
na ed oil u u es a e aded in he Shanghai In e na ional Exchange (Kamel and
Wang 2019).
A second ac o is ha he incen i e o keep cu ency ese es in dolla s has
declined in Gul coun ies. The e was allegedly an ag eemen since he ea ly
1970s be ween he Uni ed S a es and Saudi-A abia, ha he o me would p o-
ide a mili a y secu i y umb ella o he egion. In exchange, dolla e enues
om oil ade would be ecycled in o US easu y pape s by Saudi A abia (Spi o
1999). Tha has epo edly ended some while ago and Gul s a es slowly di e si-
y hei in es men s away om he Uni ed S a es (Momani 2008; The Economis
2023). The di e si ica ion incen i e is suppo ed by he ac ha he dolla ex-
change a e and he p ice o oil ha e become posi i ely co ela ed in ecen yea s
(Ho mann e al. 2023). Pegging o he dolla and holding dolla ese es se es
as a s abilize when oil and dolla a e nega i ely co ela ed bu p ocyclical when
he co ela ion is posi i e. Risk aspec s sugges ha di e si ica ion away om
he dolla will con inue.
Finally, e en he Eu opean Union has aken measu es o educe i s ulne abil-
i y o dolla sanc ions. In esponse o he 2018 unila e al and uncoo dina ed e-
imposi ion o sanc ions by he Uni ed S a es agains I an, F ance, Ge many and
he Uni ed Kingdom c ea ed hei own clea inghouse o ade wi h I an, he
Ins umen in Suppo o T ade Exchanges (INSTEX). Thei a emp o bypass
he dolla paymen sys em en i ely was joined by o he coun ies and inally he
sys em was opened o all EU coun ies (Cip iani e al. 2023). INSTEX was de-
signed no only as a messaging sys em bu as a clea inghouse ha would man-
age paymen s be ween Eu ope and I an. Paymen s should be ne ed wi hin he
sys em, and paymen s be ween I an and he Eu opean Union would only occu
o se le impo -expo imbalances. The sys em, howe e , was a ailu e. Al-
hough i s ill exis s, he e was only one ansac ion in 2020, co e ing he impo
o medical equipmen by I an. The sys em was decla ed as being useless by he
I anian cen al bank in 2021 (Co se i e al. 2024).
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