Why Russia-Iran Sanctions Put Gold Back in the Conversation

A Russian Bank Became the Latest Target of Washington’s Iran Campaign

The latest U.S. sanctions action against Iran did not target an Iranian bank. On September 14, the Treasury Department’s Office of Foreign Assets Control designated VTB Bank, one of Russia’s largest financial institutions, under Executive Order 13902 for operating in Iran’s financial sector. VTB was already blocked under Russia-related authorities. The new designation treats a major Russian bank as part of Iran’s sanctions-evasion infrastructure, adding Iran-related secondary-sanctions risk. 

According to Treasury’s September 14 announcement, VTB established correspondent relationships with sanctioned Iranian financial institutions, expanded its presence in Tehran and took steps to move billions of dollars in frozen Iranian assets. Most revealing for the larger monetary story, OFAC says the bank created a settlement system using correspondent accounts denominated in Iranian rials and Russian rubles to increase bilateral trade. The action exposes an increasingly important contest over how sanctioned economies conduct cross-border commerce when dollar-centered financial channels are constrained.

Russia and Iran Have Been Building This Infrastructure for Years

The ruble-rial mechanism did not appear suddenly in September. Russia and Iran have discussed direct banking relationships and national-currency settlement for at least a decade. In 2017, the Bank of Russia said the countries’ central banks were working on correspondent accounts, trade settlement in national currencies and integration of their domestic payment-card systems. 

Those efforts became more explicit as both countries faced expanding Western restrictions. Their Comprehensive Strategic Partnership Treaty, signed in January 2025, calls for a modern payment infrastructure independent of third countries, greater direct interbank cooperation and bilateral settlements in national currencies. Reducing reliance on outside financial intermediaries thus became a stated component of the bilateral relationship. 

VTB gave that ambition a practical banking channel. According to Treasury, the Russian lender opened offices in Iran, developed relationships with sanctioned Iranian banks and constructed rial-ruble correspondent arrangements. Treasury had already identified VTB in August 2026 in connection with currency conversions involving an Iranian shadow-banking network. The September designation therefore looks less like the discovery of a new relationship than an escalation in Washington’s response to a financial architecture that had been developing over time. 

Why Treasury Is Targeting the Settlement Layer

The power of U.S. financial sanctions extends beyond prohibiting American companies from dealing with a blocked entity. Under Operation Economic Outcast, Treasury has emphasized secondary-sanctions exposure for foreign financial institutions that continue facilitating Iranian business. The VTB action sharpens that warning because it targets the mechanism through which trade can be settled, rather than only the commodity, ship or company involved in a transaction. 

Correspondent banking is crucial here. A direct rial-ruble system can reduce the need for transactions to pass through dollars or Western correspondent banks. That does not make commerce immune to sanctions. Banks still need counterparties, liquidity and access to international markets, and companies touching blocked institutions can encounter legal and commercial risks elsewhere. Treasury’s September 14 action is designed to increase those costs by making continued dealings with VTB under its Iran designation potentially more consequential for foreign financial institutions.

Russia and Iran do not need to replace the dollar globally for alternative settlement to matter to them. A narrower objective is enough: create usable channels for bilateral trade that require fewer financial touchpoints controlled by countries enforcing sanctions. National currencies, direct bank links, payment networks, clearing arrangements and other assets can each serve different parts of that objective.

Gold Fits the Story, but Not as a Ruble-Rial Payment System

Gold enters this discussion because it can sit outside another country’s banking liability and has long functioned as an internationally recognized reserve asset. It would be misleading, however, to draw a straight line from the VTB sanctions to greater Russian or Iranian gold demand. The September 14 Treasury release does not say that VTB’s rial-ruble settlement mechanism uses gold, and there is no basis for describing the arrangement as gold-backed.

The relevant connection is broader. Sanctions have made reserve composition, custody and convertibility more consequential. Russia learned that distinction dramatically after its 2022 invasion of Ukraine, when substantial foreign reserves became inaccessible under Western restrictions. Russian gold held domestically was different in one important respect: it could not simply be frozen by a foreign custodian. Yet bullion is not automatically spendable in international commerce. Turning it into imports or usable currency still requires willing counterparties, logistics and transactions that may themselves face sanctions.

Washington has explicitly anticipated that possibility. OFAC guidance on Russia-related gold transactions states that deceptive or structured transactions involving gold or other precious metals can be sanctionable, while the United States prohibited imports of certain Russian-origin gold in June 2022. Gold therefore offers a form of reserve diversification, but not a sanctions-proof financial system. 

Central Banks Are Increasing Gold Without Abandoning the Dollar

The wider reserve-management trend helps explain why gold belongs in the conversation without turning the VTB story into evidence of an imminent monetary revolution. The World Gold Council’s 2026 Central Bank Gold Reserves Survey found that central banks accumulated an average of roughly 1,000 tonnes annually over the previous four years, about twice the average pace of the preceding decade. Among surveyed reserve managers, 74% expected U.S. dollar holdings within global reserves to be moderately or significantly lower five years from now, while respondents expected gold holdings to rise. 

Their stated reasons are revealing. Crisis performance, portfolio diversification, inflation hedging and geopolitical-risk protection all ranked among the motivations for holding gold. A record 45% of respondents expected their own institution’s gold reserves to increase over the following 12 months.

Those findings neither show central banks abandoning the dollar nor prove sanctions are the principal cause of gold purchases. Reserve managers hold gold for overlapping monetary, risk-management and diversification reasons. They do show why a world of more fragmented payment networks and geopolitical restrictions can increase interest in an asset that is not simultaneously someone else’s sovereign liability. That broader distinction also emerged in our recent examination of how Iran sanctions are affecting China’s yuan and gold strategy.

The VTB Case Is Really About Financial Optionality

The September 14 designation provides a useful snapshot of how financial fragmentation actually develops. It is less dramatic than the creation of a new reserve currency and more practical: two sanctioned countries establish direct banking relationships, settle more trade in their own currencies and build infrastructure intended to reduce dependence on third-country systems. Washington responds by extending sanctions pressure to those new channels, raising the cost of using them.

That contest can continue without producing a clean winner. The dollar retains deep advantages in liquidity, trade finance and global financial infrastructure. Alternative arrangements can still become more useful at the margins, particularly among countries facing similar restrictions. Gold occupies another layer of that landscape. It can diversify reserves and reduce certain forms of counterparty exposure, but it cannot by itself reproduce the payments, credit and liquidity functions of an international banking system.

For gold investors, that distinction is more informative than predictions of a sudden end to dollar dominance. The VTB action shows that sanctions are increasingly reaching beyond individual companies and commodities into the architecture used to move money. If that pressure encourages more countries to reassess how they hold reserves, settle trade and manage access to foreign financial systems, gold’s strategic role can grow without ever becoming the currency behind a ruble-rial transaction. Investors can follow the live gold price as markets continue to weigh monetary policy, geopolitical risk and changes in global reserve behavior.