Why Sanctions Didn't Stop Russia's Economy: Forbes

US sanctions have historically caused fear in global markets. Companies and countries have avoided having problems with Washington. However, despite unprecedented measures against Russia, the country continues to trade billions of dollars, writes Forbes. Although traditional banking channels have been closed, digital finance, payment innovations, and alternative routes have reshaped the movement of money. The example of Russia underscores the resilience of financial networks and the limitations of sanctions in a digitized economy.

When sanctions hit Russia's largest banks in 2022, the expectations were clear: Moscow would be cut off from the global system, followed by a financial collapse. But those predictions did not come true.

Russia redirected its oil exports to Asia, often using non-dollar currencies. "Shadow fleets" avoided Western insurance and created parallel supply chains. Meanwhile, fintech solutions, including digital wallets and regional payment channels, allowed transactions to be conducted, bypassing sanctioned banks. The growth of China's CIPS network, India's rupee-based settlement systems, and other Russian domestic fintech alternatives showed that sanctions are powerful, but not impenetrable.

For investors and operators in the fintech sector, this reality is important. The application of sanctions is increasingly extending to digital asset platforms, payment providers, and cross-border fintech startups. The compliance risk is no longer limited to banks. Global regulatory fines reached a record $19.3 billion in 2024, and 90% of fintech companies report that meeting compliance requirements is difficult.

Inside Russia, the story is about adaptation. Western brands disappeared from shopping malls, but replacements appeared within months. Russian tech companies replicated fast-food apps, transportation platforms, and e-commerce logistics. Import substitution expanded rapidly.

Here, financial technology played a dual role. Domestically, Russian payment processors and state-supported digital banks filled the gap left by Visa and Mastercard. Consumers adapted seamlessly, continuing to use cards or mobile wallets with new logos. Internationally, crypto platforms offered another route, although the volumes were small compared to oil and gas exports.

Sanctions can limit options, but rarely do they close them completely. For digital finance leaders, this underscores the importance of scenario planning. If regulators expand sanctions regimes to include new sectors, such as artificial intelligence and blockchain, companies will need strategies to adapt, restructure, and transform their compliance processes. Investors evaluating startups in cross-border payments, money transfers, or embedded finance must analyze how resilient these platforms are to regulatory shocks.

Sanctions remain an important lever of US power. But their effectiveness now depends less on Washington's unilateral decisions and more on building global coalitions. Countries that refuse to cooperate create escape routes that mitigate the impact. Bilateral trade between China and Russia reached a record $234 billion in 2024.

For the financial technology sector, this changing power dynamic opens up both risks and opportunities. On the one hand, companies that enable gray-zone transactions face increased scrutiny. On the other hand, the demand for compliance technology, real-time risk monitoring, and AI-powered sanctions screening is growing.

The example of Russia makes one thing clear: sanctions are not going away. Moreover, they are turning into a permanent component of the global financial landscape. For fintech, this presents both a limitation and a stimulus.

As sanctions reshape global trade, fintech is at the forefront. The winners will be those who build not only for speed and scale but also for resilience and adaptability, Forbes predicts. In the competition between geopolitics and innovation, the story is no longer about whether sanctions work, but how financial technology is reshaping the battlefield.