Iran Uses Cryptocurrency to Bypass Sanctions and Fund Allies

The government of Iran is increasingly utilizing cryptocurrencies to bypass international sanctions and maintain economic stability amid conflict in the Middle East. Between February 28 and March 2, coinciding with Israeli-US airstrikes, more than $10 million in digital assets exited Iranian exchanges, with nearly one-third shifting to foreign platforms by March 5.

The Islamic Revolutionary Guard Corps and the Central Bank of Iran prioritize dollar-pegged stablecoins to finance armed groups such as the Houthi rebels, facilitate the sale of embargoed oil, and trade advanced weaponry, including drones and ballistic missiles. In the previous year, wallets linked to the Revolutionary Guards received over $3 billion.

While the state uses digital assets for strategic funding, Iranian civilians have adopted Bitcoin as a financial lifeline to shield savings from inflation that approached 50% before the war. This shift toward a shadow banking system has also attracted security risks; in June 2025, the cryptocurrency platform Nobitex reportedly lost $90 million to hackers linked to Israel.