It’s no secret that Russia, China, Iran, Turkey, Venezuela and many other nations are trying to escape from the U.S. dollar payment system. The U.S. throws its weight around in geopolitics by using economic sanctions, account freezes and blacklists aimed at political rivals.

These punitive measures are backed up by U.S. control of the global payments system. The control by the U.S. is made possible by the fact that 60% of global reserves, 85% of global payments and almost 100% of oil purchases are denominated in dollars. All dollar payments must pass through a system controlled by the U.S. Treasury, Federal Reserve and the big clearinghouse banks.

Naturally, countries that are targets of U.S. sanctions or just want more degrees of freedom are working hard to escape from the dollar payments system. Some such as China are expanding the use of their own currencies in global trade. Others such as Russia are acquiring gold. Now a new option to escape from dollars has emerged — cryptocurrencies!

Russia is working on a cryptoruble. Venezuela has already launched its own cryptocurrency called the “petro,” ostensibly backed by Venezuelan oil reserves. (The U.S. had already declared that transactions in petros may be illegal under U.S. law if they constitute sanctions avoidance.) The Marshall Islands, a small island nation with a dollarized money system, just announced that it is also starting a cryptocurrency alternative to the dollar. 

This article describes the most credible and important proposed cryptocurrency issuer of all — Iran. It’s understandable that Iran wants a dollar alternative, because new sanctions are about to be imposed on Iran for violations of U.N. sanctions over its missile program. Maybe this will succeed or maybe the U.S. will try to shut it down before it gets off the ground.

Either way, it’s an interesting case study in the larger effort by major countries to abandon the dollar.