Iran has increasingly turned to cryptocurrencies as a means to sustain trade and navigate the mounting economic pressures caused by US sanctions and an ongoing blockade. In response to these challenges, Tehran has eased its stringent foreign currency controls, allowing businesses greater flexibility in managing cross-border transactions.
For years, Iran’s economy has operated under tight restrictions intended to regulate access to foreign currency. Importers and exporters faced significant hurdles requiring them to sell foreign earnings through a government-run platform at state-determined exchange rates—often less favorable than market rates. This system led many companies to hold large amounts of undeclared funds abroad or bring money back into the country through unofficial channels. Iranian judiciary officials estimate that more than $100 billion in undeclared earnings remain outside formal reporting mechanisms.
More recently, however, sources within Iran’s business community and government insiders report that the central bank has quietly encouraged firms to repatriate funds by any means necessary, including the use of cryptocurrencies. Traders have increasingly used digital assets such as Tether, a US dollar–pegged stablecoin, as well as bitcoin, to complete international payments through local cryptocurrency exchanges. This shift has allowed Iranian exporters to bypass the official foreign-exchange system and conduct currency exchanges within the country’s large open market, often enjoying more favorable rates.
A business executive close to the regime said the central bank no longer inquires about the origin of transferred funds and that receiving cryptocurrencies for export proceeds has become a normalized practice, particularly since the outbreak of the conflict involving the US and Israel in February. The central bank declined to comment on these developments.
Iran has long sought to develop alternative financial channels to circumvent sanctions, but the economic isolation has intensified since the United States enacted a naval blockade targeting Iranian ports and increased pressure on Tehran’s international partners. Washington has also announced intentions to sanction banks in Egypt and Turkey and has targeted firms connected to Iranian aviation. Additionally, the US Treasury has warned that Iran is increasingly relying on cryptocurrencies to evade economic restrictions.
According to Iranian officials, compliance with foreign currency repatriation rules has been inconsistent. Zahibollah Khodaian, head of Iran’s General Inspection Organisation, recently stated that over 20,000 individuals and companies failed to return nearly €94 billion in export earnings as mandated.
Data from blockchain analytics firms indicates significant crypto activity linked to Iran’s economy. In the past year, around $10 billion worth of cryptocurrencies moved through Iranian networks. Tether, whose stablecoin provides a near-constant value against the US dollar, has become particularly important in this context. The company declined to comment but previously froze $34 million in tokens tied to wallets allegedly connected to the Iranian central bank following US sanctions enforcement.
As Iran seeks to sustain its war-battered economy amid tight sanctions and international isolation, cryptocurrencies have emerged as a crucial tool for facilitating trade and financial flows outside traditional banking systems.