Why Washington Targets Isolated VTB

U.S. sanctions target the Russian VTB Bank in order to reduce Russia and Iran's ability to conduct financial transactions between them outside the U.S. dollar system, focusing on hindering the development of independent payment settlement networks. Although the sanctions have diminished the effectiveness of isolated banks, Moscow and Tehran can still utilize alternative channels and operate in their local currencies, such as the ruble and the rial, to facilitate bilateral trade. The ultimate goal is to make their financial transactions more costly and slower, and to restrict settlement networks to limited corridors rather than completely blocking them. This highlights the struggle between Washington’s ability to intimidate intermediaries and Russia and Iran’s efforts to build stable, independent payment infrastructures.

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