For many years, Iran has been restricted from using the normal global banking system because of international sanctions. These sanctions were put in place by the United States, European countries, and other governments mainly because of concerns about Iran’s nuclear program and support for militant terrorist groups across the world.
Because of these restrictions, Iran’s major banks cannot send money through systems like SWIFT, which most countries use to move money internationally. This has left Iran largely cut off from the global financial system, making regular transfers of money very difficult.
The result of this isolation means that Iran cannot easily pay for imports, receive foreign currency from exports, or pay foreign companies through normal banking channels. This financial isolation has pushed Iran to look for alternatives.
One of the main alternatives it has turned to in recent years is cryptocurrency — digital money like Bitcoin or stablecoins such as USDT (a coin that is meant to be worth one U.S. dollar).
Jemi Motesho
Crypto as a Financial Channel Outside Traditional Banking
Cryptocurrency offers something that normal money systems do not: it can be transferred without needing a traditional bank or approval from governments in the financial chain. Because cryptocurrencies live on public blockchains (special computer networks), anyone with access to the internet and the right keys can send and receive digital money anywhere in the world. This appeal is especially strong for countries like Iran.
A recent report by the blockchain intelligence firm TRM Labs showed how Iran’s Islamic Revolutionary Guard Corps (IRGC) used cryptocurrency exchanges to move about $1 billion worth of digital money between 2023 and 2025. This happened in spite of sanctions that should have blocked those transactions. The transfers used a popular stablecoin called USDT on the Tron blockchain because it is liquid and easier to use for international transfers. The report noted that IRGC-linked transactions accounted for more than half of the trades on some of these platforms.
Miad Maleki, a former U.S. Treasury official who has studied Iranian financial activity, said of the growing crypto trade: “The $1 billion figure over two years demonstrates that digital currencies are becoming a financial channel for Iran’s shadow banking apparatus.”
This means that instead of going through the normal banking world that sanctions block, Iran is using cryptocurrencies to create a parallel system that can still move money internationally. Crypto does this because it does not rely on banks or central authorities to approve transactions.
Why Stablecoins Like USDT Are Important
Most people think of Bitcoin when they think of cryptocurrency, but for moving funds internationally, stablecoins like USDT (issued by Tether) are often more useful. Stablecoins are digital assets designed to stay tied to the value of a stable currency like the U.S. dollar. This makes them more predictable for trade and payments.
According to another recent analysis, Iran’s central bank appears to have used a large amount of USDT-mover $500 million — as part of a strategy to maintain access to dollar value even while being excluded from the global banking system. Because the Iranian rial has been losing value, stablecoins can act as a way to preserve value and conduct external financial operations.
In response to media questions about this activity, Tether representatives said: “Tether maintains a zero-tolerance policy toward the criminal use of our financial products. We work closely with law enforcement globally to identify and promptly, upon request, freeze assets to prevent further movement whenever they are identified to be in connection to illegal activity.”
Jemi Motesho
The Role of Economic Crisis and Currency Decline
Part of the reason crypto has become popular in Iran goes beyond state-level sanctions. Ordinary Iranians also have been using digital assets because of economic hardship and high inflation. The Iranian rial has lost a lot of its value in recent years, leading people to look for ways to preserve their savings. According to Chainanalysis, cryptocurrency activity in the country reached an estimated $7.78 billion in 2025, and many users were moving crypto to personal wallets to protect their money or send it abroad.
This dual use — for both ordinary citizens and state-linked institutions — - shows how deeply embedded crypto has become in Iran’s financial life. While normal people may be trying to protect their savings, the state and military-linked actors are using the same tools for international payments and sanctions evasion.
How Crypto Helps Iran Pay for Imports and Access Foreign Funds
Because Iran cannot use normal banking channels for import payments or receive foreign currency easily, cryptocurrency provides a possible alternative. TRM Labs highlighted that Iran uses digital assets to pay for imported goods that cannot be processed through traditional systems and to offset lost revenue from sanctions.
In essence, instead of needing a foreign bank to send money to a supplier, Iran can convert currency into stablecoins or other crypto, send it through blockchain networks, and then convert it back into fiat currency outside of Iran’s banking system. This bypasses the need to rely on banks that might be blocked by sanctions.
This method is not perfect, and enforcement has tried to catch up. For example, regulators have identified and frozen some wallets believed to be linked to Iranian financial actors. But because blockchain wallets can be created quickly and transactions are often routed through many intermediate accounts, it remains challenging for authorities to stop all such flows.
The Challenges and Risks of Using Crypto for Fund Movement
Using cryptocurrency in this way is not without its challenges.
Blockchain activity is actually transparent by default, but tracing value through many wallets, exchanges, and decentralized services is still complex and resource-intensive. Authorities can sometimes freeze assets once they identify them, but the fluid and decentralized nature of crypto makes complete surveillance difficult.
Furthermore, while crypto can help move funds around, it does not magically remove the effects of sanctions or fully open international trade channels. Many countries and platforms work hard to block Iranian actors from using their services, and some companies have frozen assets linked to illicit activity.
Jemi Motesho
