| Currency Dominance |
USD used in ~60% of global trade, 88% of forex trades (SWIFT 2024). |
Use local currencies (e.g., Russia-India rupee/ruble trade), barter, or gold. |
Imbalance issues (India won’t hoard rubles), gold is illiquid, barter is inefficient. |
BRICS+ currency basket (backed by commodities/gold) or CBDCs (Central Bank Digital Currencies). |
Requires trust & coordination among BRICS; CBDCs face regulatory pushback. |
| SWIFT Access |
U.S. can pressure SWIFT to cut off banks (e.g., Iran in 2012, Russia in 2022). |
Use alternatives like Russia’s SPFS, China’s CIPS, or crypto. |
SPFS/CIPS handle <5% of global payments; crypto lacks scale and is traceable. |
Expand CIPS/SPFS + blockchain messaging (e.g., Ripple/XRP for sanctions-proof settlements). |
Still limited by USD dominance; U.S. can target blockchain nodes. |
| Clearing Systems |
CHIPS clears 95% of USD transactions; Fedwire is ultimate settlement layer. |
Use non-USD systems (e.g., EU’s INSTEX for Iran), but volume is tiny. |
INSTEX processed just €1M in 3 years (vs. Iran’s pre-sanctions €50B/year trade). |
Bilateral payment corridors (e.g., China-Russia CBDC bridge) + offshore yuan hubs. |
Requires deep economic alignment (e.g., China-Russia trust issues). |
| Secondary Sanctions |
Non-U.S. firms (eee.g., EU banks) fear penalties if they deal with blacklisted entities. |
Trade via intermediaries (e.g., China, UAE) or shell companies. |
U.S. tracks and sanctions enablers (e.g., 2023 UAE firms aiding Russia). |
State-backed “sanctions-proof” entities (e.g., Russia’s Rosneft trading via obscure subsidiaries). |
High operational complexity; U.S. can still pressure host countries. |
| Commodity Trade |
80% of oil trades in USD; sanctions block access to key buyers (e.g., EU, Japan, S. Korea). |
Sell oil/gas in yuan/rupees (e.g., Russia to India/China) at discounts (20-30% below market). |
Limited buyers, revenue stuck in local currencies (e.g., India’s rupee glut problem). |
Pre-sanctions stockpiling + long-term supply contracts in local currencies (e.g., China’s 30-year gas deal with Russia). |
Requires massive reserves; locks in unfavorable terms. |
| Technology Control |
U.S. dominates semiconductors, aerospace, software (e.g., Huawei crippled by chip bans). |
Use Chinese/Russian substitutes (e.g., SMIC chips, Russian Baikal CPUs). |
Lower quality, supply chain gaps (e.g., Russia’s 90% drop in chip imports post-2022). |
Parallel imports (e.g., Russia via Armenia/Kazakhstan) + accelerated domestic R&D (e.g., China’s chip self-sufficiency push). |
Slow (5-10 years for competitive chips); smuggling is risky. |
| Financial Isolation |
Frozen reserves (e.g., $300B+ Russian assets seized), blocked IMF/WB loans. |
Build forex reserves in gold/yuan, but liquidity is low. |
Yuan isn’t freely convertible; gold can’t fund urgent imports. |
Diversify reserves into crypto (e.g., Bitcoin) + bilateral swap lines (e.g., China’s RMB swaps). |
Crypto volatility; swap lines depend on partner’s willingness. |
