Russia and Iran working on a new banking system that bypasses the dollar

So… what would you do if you are one of the two countries that have been put under the Damocles Sword of dollar based economic sanctions in the past decade?

You can A. - Impose reverse sanctions of your own

B. - Impose reverse sanctions on allies of the United States

C. - Go black market like Iran did for a decade when they traded oil for gold through Turkey

Or D. - Pick up your ball and go play at a field where the United States isn’t invited.

On Sept. 16, it appears that both Russia and Iran have chosen D as they are now involved in talks to create a banking system between the two countries that conducts transactions in each other’s currencies, and would not accept dollars in any form.

Moscow and Tehran are actively working on opening a joint bank with plans to carry out operations in national currencies, according to the former president of the Russia-Iran Friendship Society Bahram Amirahmadiyan.

The decision on setting up the bank was agreed last year but Western sanctions against Tehran have been the main obstacle.

“Of course, the prospect of Russian banks opening in Iran is very attractive and important because it can widen and improve our economic cooperation,” Amirahmadiyan told Sputnik news agency, adding that banking cooperation between the two countries has a long history.

According to the official, Moscow and Tehran want to carry out all trade operations in national currencies but the plan has yet to be resolved.

“At the moment, all banking operations between Russia and Iran are carried out in dollars or euro. It’s very inconvenient, because all these operations are controlled either by the EU or US central banks,” Amirahmadiyan said.

He added the Russian ruble could also benefit from the bank’s entry into the Iranian market, which would enable Iranian companies to buy Russian goods in rubles.

“I also think the Russian ruble can strengthen a lot on the Iranian currency market, and become a very attractive currency… I hope the same will happen to the Iranian rial in Russia,” he said. - Russia Today

Since Russia already has direct bi-lateral trade with the world’s leading producer and exporter (China), establishing a banking system with Russia would create the scenario where nation’s no longer would have to use the global reserve currency since they could simply use Russian financial institutions as a middleman, and import anything through China which would act as a global marketplace between Asia and Europe.

The U.S. is quickly realizing that the world doesn’t need to hold a new ‘Bretton Woods’ conference to determine the fate of the dollar, simply because all they have to do is duplicate the financial infrastructures running the West, and then use them to bypass SWIFT and the U.S. banking system.  And as more and more Asian, Eurasian, Middle Eastern, and African countries find this more attractive than living under U.S. hegemony, then Europe will suddenly have to make a choice of either joining the new system, or becoming shackled to another corpse.

Kenneth Schortgen Jr is a writer for,, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.