Washington’s attempts to dominate global finance through tight sanctions could be strengthening America’s adversaries.
Iran has been avoiding U.S. sanctions by using Chinese yuan to sell its oil, the Wall Street Journal (WSJ) reported Tuesday. This avenue opened amid years of American leaders making it less desirable for China, Iran, and Russia to use the U.S. dollar.
Among the White House’s bargaining chips in the ongoing Iran nuclear deal talks is relief from U.S. sanctions, which could unfreeze some of the approximately $100 billion in frozen Iranian assets, according to WSJ. However, the U.S. Treasury reportedly said most of Iran’s $43 billion in oil revenue from 2024 were paid for in yuan.
Russia also increased yuan use amid U.S. sanctions spurred by the Russo-Ukrainian War, according to WSJ. Over 90% of trade between Russia and China is now conducted through yuan and Russian rubles, according to Russian officials, up from the pre-war 2%.
Republican Sens. Chuck Grassley of Iowa and John Cornyn of Texas introduced a bill to give stolen Russian assets to Ukraine.
These actions come as Brazil, Russia, India, China, South Africa, and six other nations comprise the BRICS coalition to create alternatives to dollar-based financial systems.
“[Yuan-based systems] make it easier to work around U.S. sanctions,” former International Monetary Fund staffer Josh Lipsky said, WSJ reported. “They cloud the U.S. intelligence community’s ability to see financial flows.”
Lipsky is now the Atlantic Council’s vice president and chair of international economics.
In addition to yuan, ships paid Iran cryptocurrency for safe passage through the Strait of Hormuz, the WSJ reported in April.
The U.S. seized approximately $1 billion total in Iranian crypto assets since the White House launched Operation Economic Fury in April to counter Iran’s sanction evasion systems, Treasury Secretary Scott Bessent announced May 29.
“[The U.S. Department of Treasury] has successfully targeted Iran’s international shadow banking infrastructure, exploitation of crypto, shadow fleet, weapons procurement networks, funding for its terrorist proxies in the region, and independent ‘teapot’ refineries that support Iran’s oil trade,” a U.S. Treasury official told the Daily Caller News Foundation. “These actions have disrupted tens of billions of dollars in revenue that would otherwise be used to fund terrorism.”
“The U.S. dollar is the strongest currency in the world. Under President Trump’s leadership, the United States will continue to leverage its economic strength to protect American interests and hold sanctions violators accountable,” the official added.
Iran will likely start using U.S. dollars again if the negotiations succeed, according to Bessent.
“[Venezuela was] not allowed to translate or to transact in dollars. And now … the dollar is going to be the centerpiece of their trade. They were selling discounted oil to China and not getting dollars,” the treasury secretary told CNBC in a Wednesday interview. “We’re seeing in the Iranian negotiations, the Iranians will be invoicing in dollars. So, everything we are doing is pushing the dollar back. It’s never left as the centerpiece for the global currency system, but we’re reinforcing it.”
(DCNF)