China, Iran and Dollar Derisking

For over a decade, MassPoint’s Hdeel Abdelhady argued that U.S. sanctions power rests on a specific architecture: dollar dominance plus the legal reach it enables. And that this architecture faced a growing structural challenge — not from efforts to displace the dollar globally, but from sovereign derisking: the deliberate reduction of exposure to the U.S. dollar and financial system by states seeking independence from U.S. sanctions jurisdiction.

A June 23, 2026 Wall Street Journal story on China, the yuan, and the erosion of U.S. sanctions power — set against the ongoing Iran conflict — maps the mechanics of that derisking and its consequences. And it occasions revisiting MassPoint’s publications in the area.

MassPoint’s U.S. sanctions and de-dollarization publications, in part:

In 2015, we published a note identifying the emerging threat. China, the BRICS nations, and others were developing trade and finance channels outside the U.S. dollar system and the Bretton Woods framework. We argued that U.S. dollar and financial system-tied jurisdiction didn’t need to be displaced globally to be curtailed — parallel channels, for enough transactions, would be sufficient. Central to that argument was China’s New Silk Road: a physical and financial infrastructure project expected to reach 4.4 billion people across 65 countries, and to generate cross-border trade and finance untethered to the United States.

In 2018, writing for Law360, we identified a compounding risk: the Trump Administration’s strategy to weaponize U.S. sanctions, anti-corruption, and anti-money laundering laws as trade war instruments against economic rivals — particularly China. We noted that overuse of these tools for trade advantage risked undermining their integrity and accelerating the search for alternatives. That same year, writing for Thomson Reuters Regulatory Intelligence as U.S. sanctions on Iran were reimposed, we mapped the two pillars of U.S. sanctions reach — dollar and financial system-tied jurisdiction, and U.S. market power through secondary sanctions — and echoed former Treasury Secretary Jack Lew’s warning that overuse of sanctions risked undermining their own effectiveness.

In 2022, writing for Thomson Reuters as Russia sanctions were imposed following the invasion of Ukraine, we analyzed the blocking and non-blocking measures deployed — among the most sweeping in U.S. sanctions history — and their systemic implications.

In 2026, the WSJ reports that Iran earned an estimated $43 billion in oil revenue in 2024 — under sanctions designed to prevent exactly that. Most of it paid in yuan, through Chinese financial infrastructure that never touched the U.S. system. No dollar clearing. No U.S. jurisdiction. The Belt and Road has become operational derisking infrastructure. The Strait of Hormuz — where Iran has begun collecting tolls payable in yuan and cryptocurrency — has become its punctuation mark.

What Hdeel Abdelhady called the leverage architecture — dollar dominance plus the legal overlay it enables — is being systematically derisked. The WSJ piece is a geopolitical story. It is also a legal and structural one, with implications well beyond Iran.

More to come. In the meantime, see some of our sanctions and related pieces here, and learn more about MassPoint PLLC and its Principal, Hdeel Abdelhady.