Iran Turns to Cryptocurrencies Amid Escalating Conflict with US

The ongoing conflict between the US and Iran has taken a new turn, with tensions escalating in the Hormuz Strait. The recent attacks on American ships by Iran have led to a series of retaliatory measures, including the destruction of Iranian oil tankers. In response, Tehran is exploring alternative financial channels to maintain its international trade.

Iran's central bank has reportedly instructed businesses and traders to use cryptocurrencies like Bitcoin and tether (USDT) to repatriate foreign funds. According to Chainalysis and TRM Labs data, around $8-10 billion worth of cryptocurrency transactions were linked to Iran in 2025. However, the Cambridge Centre for Alternative Finance estimates that Iran's share of global Bitcoin mining is only 0.12-0.2%, which may be an underestimation due to VPN usage by Iranian miners.

The use of cryptocurrencies as a payment method has become increasingly prevalent in Iran, with reports suggesting that some companies are accepting digital currencies for international trade. In April, it was reported that the Hormuz Strait's safety fees were being paid in Bitcoin and USDT. The US government has also taken notice, with the Treasury Department seizing around $1 billion worth of cryptocurrency linked to Iran in May.

The Iranian central bank appears to be easing its stance on cryptocurrency trading, no longer strictly enforcing rules on cryptocurrency exchanges. This shift is likely driven by geopolitical pressures rather than technological innovation.