Byron Gilliam is credited as the author of the source article, with TechFlow listed as the Chinese translator.
Stuart Levey, the former U.S. Treasury official who later became CEO of Facebook’s stablecoin project Diem, is described in the article as the official who changed how U.S. financial sanctions worked. Drawing on Edward Fishman’s book Chokepoints: American Power in the Age of Economic Warfare, the piece says Levey’s lasting insight was simple: rather than trying to persuade foreign governments first, Washington could go straight to banks and tell them who they should stop dealing with.
The story begins with the 2004 U.S. presidential debate. When John Kerry argued that President George W. Bush had not been tough enough on Iran economically, Bush fired back: “We’ve sanctioned Iran already! There’s nothing more to sanction.” At the time, the article says, trade between the two countries had nearly dried up, which made the claim sound plausible.
Yet American-made consumer goods still showed up on Iranian shelves. The article cites a New York Times report saying that Mattel refrigerators, Diesel clothing and Victoria’s Secret lingerie were popular there. Thousands of Iranian businesses, it says, were getting around U.S. restrictions by opening offices and bank accounts in Dubai. One businessman told the Times that “the best place to do business in Iran” was Dubai.
Fishman wrote that Levey treated that gap as a personal challenge. At the time, Levey was serving as Treasury undersecretary for terrorism and financial intelligence, with a mandate to find ways to cut off funding to sanctioned states and organizations. Fishman called him “the founding father of America’s financial warfare,” while others described him as a “sanctions technocrat” or a “guerrilla warrior in a gray suit.”
A sanctions shift built around banks
According to the article, Levey’s breakthrough came in 2006 after he read a news report saying a Swiss bank had voluntarily cut all ties with Iran. “I had an epiphany,” he later said. In his view, saying the U.S. had already sanctioned Iran to the maximum only meant American companies were barred from doing business with the country. It did not mean the rest of the world had stopped.
The core loophole was correspondent banking. Iranian banks had been banned from dealing directly with U.S. banks since the mid-1990s, but they could still reach the U.S. financial system indirectly through foreign intermediaries. To make a dollar payment, an Iranian bank could send funds to a bank in Europe or Asia, and that bank could then use a U.S. correspondent bank to settle the transaction with the recipient.
The article says this now looks obvious, but before Levey, few inside government paid much attention to that corner of the financial system. Even if they did, the assumption was that stopping such flows would require persuading foreign governments to order their domestic banks to stop dealing with Iran.
Levey saw another route. He believed he could lobby the banks directly.
Fishman wrote that Levey’s experience in private law practice had taught him how executives viewed regulatory and reputational risk. On that basis, he believed banks could be convinced to cut ties with Iran even if their own governments did not back such a move. The persuasion also carried a warning: Treasury would investigate sanctions violations that moved through correspondent banking channels.
Former Treasury Secretary Hank Paulson told Fishman, “We never threaten. We just talk about the importance of not breaking the rules and not engaging in illegal transactions.” The implication, the article notes, was obvious. A bank that violated U.S. sanctions law could face heavy fines or even lose access to U.S. correspondent banking, which would mean losing the ability to move dollars.
Within 18 months, major banks stopped servicing Iran trades
Not every bank took the message well. Fishman quoted the No. 2 executive at Standard Chartered as saying, “You fucking Americans. Who are you to tell us, to tell the world, that we can’t do business with Iranians?” Several years later, the article says, U.S. enforcement authorities fined Standard Chartered $359 million for sanctions violations.
Other banks needed little convincing. Levey told Fishman, “Chinese banks didn’t tell me they weren’t doing business with Iran. They just stopped.”
Fishman wrote that 18 months into the campaign, nearly all of the world’s largest banks had stopped providing services for Iranian transactions, even though neither their home governments nor the United Nations had required them to do so.
That outcome drew sharp reactions. One measure of the campaign’s effectiveness, the article says, was that the governor of Iran’s central bank labeled it “financial terrorism.” Fishman, by contrast, described the effort as economic warfare.
From sanctions to “economic statecraft”
The article then ties Levey’s approach to a broader policy framework. Treasury Secretary Scott Bessent said in a speech last month that “economic statecraft” means “the disciplined use of American economic power to defend sovereignty.” That includes the kind of leverage Levey identified. Access to the dollar system, Bessent said, “is no longer unconditional.”
The article adds that this conditional access did not begin with Levey. Even before his tenure, the U.S. had used denial of banking system access to punish adversaries such as Cuba and Libya. What Levey exposed more clearly was how powerful the dollar network could be as a chokepoint, and how that power could be directed toward geopolitical aims.
Bessent’s emphasis on economic statecraft is presented as a signal that Washington intends to use that power more aggressively. Fishman appears sympathetic to that idea. He believes economic warfare can serve as an effective substitute for hot war, and he argues that the U.S. should create “a standing committee on economic warfare” to generate policy recommendations faster in times of crisis.
Still, Fishman also warned that the tactic will not work forever. Financial sanctions, he wrote, are like antibiotics: they can be effective in large doses, but overuse makes them less potent. The article argues that the U.S. may already be pushing too far, as rivals — and even friends — are taking more steps to build alternatives to the dollar system.
Crypto and stablecoins are part of that alternative buildout
Some of those alternatives involve crypto, the article says, including the “tens of billions of dollars” that Iran has moved through stablecoins in recent years.
That risk of sanctions evasion is also why, according to Fishman, Levey joined Facebook’s stablecoin project Diem as CEO in 2020, “because he wanted to ensure digital currencies would not weaken American financial power.”
Diem did not last long. The article says the project shut down in less than two years.
Levey remained in the corporate world afterward. The piece closes by noting that, as Oracle’s chief legal officer, he made $14.5 million last year.