DC Can Sanction Banks, but Can’t Stop Global Trade’s Evolution

Washington knows how to shut a financial door, but it needs to pay closer attention to the alternative cross-border payment architecture being built on the other side.

Following Russia’s invasion of Ukraine in February 2022, Western governments restricted Russian banks’ access to international finance, including disconnecting designated institutions from SWIFT.

The intention was to impose costs and constrain Moscow’s ability to finance its war.

But those restrictions also strengthened an incentive American policymakers cannot afford to dismiss: building ways to trade that depend less on Western permission.

America’s objective should be to preserve its financial leverage.

That requires understanding how its competitors adapt when established channels close.

That is the uncomfortable consequence of turning financial access into a geopolitical weapon. Countries denied access have a powerful reason to develop alternatives.

Russia’s payment agents show how quickly that adaptation can occur.

When established banking channels became harder to use, importers sought alternative commercial intermediaries. What began as an urgent search for workarounds helped create demand for organized payment networks.

Intermediaries are turning disrupted banking relationships into a market for alternative settlement services.

Consider A7. In August 2025, the U.S. Treasury sanctioned A7 and its affiliated companies, citing their role in sanctions evasion. Treasury pointed to A7’s support for the sanctioned cryptocurrency exchange Garantex and its links to the ruble-backed A7A5 token.

Treasury’s designation makes A7 a sanctions-enforcement concern.

It also raises a strategic question: how effectively can Washington constrain payment networks that operate across multiple jurisdictions?

A7 describes an intermediary model using agency agreements and promissory notes; its FAQ also references SWIFT payment confirmations.

A Russian company pays rubles domestically, while a partner abroad pays the foreign supplier in local currency.

In this model, the buyer’s funds do not move directly across the border to the supplier. Instead, domestic payments on each side are coordinated through agency agreements and promissory notes.

The promissory note isn’t some novel loophole: it is an established legal instrument recording an unconditional obligation to pay a specified amount. Whether a particular transaction is lawful depends on the parties, jurisdictions and sanctions involved.

A7 advertises payments to China in as little as four hours.

Its emphasis on speed illustrates the commercial demand these networks seek to capture when established banking channels become unreliable.

Dismissing the entire development as “sanctions workarounds” misses the strategic point.

Restrictions can impose immediate costs while encouraging investment in infrastructure that reduces dependence on the channels Washington controls.

Sanctioning a provider does not erase that incentive.

Beyond Russia, governments are developing new ways to move money across borders, driven by demand for faster payments, lower costs and greater control over financial infrastructure.

Consider mBridge, a platform for settlements in central bank digital currencies involving China, Hong Kong, Thailand, the UAE and Saudi Arabia.

According to the Atlantic Council, the platform had processed over 4,000 transactions totaling $55.49 billion. That is substantial activity, though it does not establish a universal replacement for existing payment channels.

Similarly, Project Nexus, developed through the Bank for International Settlements, aims to connect the national instant payment systems of India, Malaysia, the Philippines, Singapore and Thailand, with a launch targeted by 2027.

Nexus and mBridge develop payment infrastructure; A7 arranges payments through intermediaries. Demand for better cross-border settlement extends well beyond sanctioned economies. Washington must understand that demand to retain its influence.

Does this mean SWIFT is dead?

No. SWIFT remains a leading global financial messaging network, with formidable network effects. Nor should we confuse SWIFT with the dollar: SWIFT provides messaging; it is not a currency. An alternative messaging route does not mean countries have abandoned dollar-denominated trade.

But financial dominance does not guarantee permanent control over the channels others use. America’s competitors do not need to replace every function of the existing system at once. They can build alternatives transaction by transaction.

Washington should respond with the same seriousness.

Sanctions must have clear objectives and regular assessments of how targets are adapting. American policymakers must also make legitimate dollar-based payments faster, less expensive and more attractive.

That response requires regulatory clarity at home.

The GENIUS Act established a framework for payment stablecoins, and recent SEC and CFTC guidance has clarified the treatment of other crypto assets.

America must translate clearer rules into competitive payment services businesses have practical reasons to choose.

For lawful businesses, the question is whether a payment arrives reliably, affordably and on time. Enforcement and competitiveness belong in the same strategy.

Financial leadership requires investment in the reasons others choose to participate.

The ability to exclude cannot substitute for that work.

Restrictions can impose real costs while simultaneously accelerating the search for alternatives.

Washington can close a banking channel, but it cannot outlaw the evolution of global trade.