America’s Sanctions Are Building A Post-Dollar World

Eurasia Review  |  Michael Harrison

United States economic sanctions are driving the rapid creation of a parallel global financial infrastructure as targeted nations develop alternative payment systems to bypass Washington's coercive reach. The dramatic expansion of the U.S. Treasury's sanctions list to nearly 20,000 entries by 2026 has accelerated this systemic shift, prompting even neutral states to hedge.

Historically treated as a low-cost foreign policy tool, these unilateral measures now face diminishing returns as adversaries seek to insulate their economies from dollar-based jurisdiction. Russia's reliance on a shadow tanker fleet to evade the Group of Seven oil price cap and China's Cross-Border Interbank Payment System, which processed 180 trillion yuan in 2025, demonstrate how alternative networks bypass Western clearing houses. While the dollar maintained a 57 percent reserve share in early 2026, a patchwork of local-currency trade and regional settlement mechanisms gradually erodes American leverage, threatening to permanently fragment the international financial order.

Comment

The expansion of China's Cross-Border Interbank Payment System (CIPS) to over two hundred direct participants by mid-2026 illustrates how targeted states are successfully constructing alternative financial rails. By routing transactions outside the Society for Worldwide Interbank Financial Telecommunication (SWIFT), these networks diminish the escalatory utility of Western banking bans. This systemic shift reduces the transaction costs of sanctions evasion, enabling countries like Russia to sustain defence procurement through third-country intermediaries despite G7 restrictions.

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