This article examines the scope and effectiveness of international economic sanctions, emphasizing their consequences for the civilian population of targeted countries. Focusing on Iran, the study explores how successive rounds of sanctions—imposed by the United States, the European Union, and the United Nations—have profoundly disrupted the country’s banking sector. Sanctions have constrained international transfers, blocked access to global payment infrastructures, and weakened the enforceability of bank guarantees, thereby undermining both public and private banking operations. Our analysis is expanded to consider adaptive strategies and alternatives pursued within Iran, including the use of Islamic finance instruments based on profit-and-loss sharing and qarḍ al-ḥasana mechanism, as well as emerging reliance on blockchain technologies and cryptocurrency mining. The findings further reveal that, despite being justified as “smart” sanctions, these measures have broad and counterproductive effects, eroding financial stability, harming civilians, and raising questions about the credibility of sanctions as instruments of international policy.