Author: Zen, PANews
The world’s spotlight is on Iran and the Persian Gulf. External discussions about Iran often revolve around military and regime risks, energy, and shipping impacts. Mainstream media’s real-time reports focus on military actions, oil and gas facilities, the Strait of Hormuz, and sharp fluctuations in financial markets.
But beneath these grand narratives, if you zoom in on cities like Tehran, Mashhad, and Avas, and look at ordinary people, you’ll find that in times of heightened tension, the most important things are protecting lives and assets.
After the US and Israel launched attacks, Nobitex, Iran’s largest cryptocurrency exchange, saw a surge in asset outflows—rising about 700% within minutes. Chainalysis also confirmed that within hours of the attack, the hourly trading volume of crypto assets inside Iran rapidly increased.
In just four days up to March 2, over ten million dollars’ worth of crypto assets accelerated out of Iran. Iranian citizens are turning to cryptocurrencies as a safer channel for their funds.
The Iranian economy under dollar dominance
For Iran, any escalation in Middle East tensions quickly affects its fragile exchange rates and financial system, and cryptocurrencies unexpectedly become an important medium.
Over the past few years, Iran’s economy has been sinking deeper into cycles of external sanctions, internal imbalance, and currency devaluation. The continuous weakening of the rial is no longer just a price change but has become a nationwide social panic.
In 2015, after the Iran nuclear deal (JCPOA), markets initially expected sanctions relief: the free market rate was roughly 1 USD to 32,000 rials. But after the US withdrew from JCPOA in 2018 and announced phased sanctions, the rial quickly entered the “100,000 rial era,” from a few tens of thousands. Long-term sanctions, inflation, foreign exchange shortages, and regional conflicts caused the rial to fall below 1 million in the first half of last year. When protests erupted earlier this year, it plummeted to a historic low of 1.5 million rials.
In a global financial structure centered on the US dollar, Iran, sanctioned and “cut off,” faces a dollar-dominated environment with a continuously devaluing rial.
The US dollar, as the “pivot currency” in global forex trading, enables stable, low-friction cross-border transactions for imports, debt payments, insurance, shipping, and key component procurement. Even if Iran’s printing presses run wildly, issuing more rials domestically cannot replace this critical capability.
In many commodity and supply chain pricing systems, the dollar remains the natural anchor. Under sanctions, Iran finds it harder to access dollar clearing services through normal banking channels, making hard currency access scarce and expensive.
Therefore, many Iranians’ future expectation is to quickly convert their rial holdings into more reliable assets—cash USD, gold, and cryptocurrencies like Bitcoin and stablecoins such as USDT.
As an Islamic country, Iran’s financial activities must comply with Sharia law. Islamic teachings strictly prohibit all forms of usury (Riba) and gambling (Gharar), and crypto trading, with its volatility and speculative nature, is viewed cautiously.
However, Iran’s former Supreme Leader Khamenei has shown a relatively open attitude toward cryptocurrencies, calling for the adaptation of Sharia to current realities. His stance is essentially pragmatic, reflecting a recognition of the economic deadlock.
Government and citizens both need cryptocurrencies
Due to long-term sanctions and high inflation, both the Iranian government and citizens are seeking alternatives to hard currency in their own ways. This is why crypto assets, represented by Bitcoin and stablecoins, are gradually shifting from “speculative assets” to essential value tools in Iran. They serve as a financial safety valve for citizens and as a “cyber bank” for the state to evade sanctions.
Iran’s government’s attitude toward cryptocurrencies is a mix of “love and hate,” utilizing and suppressing simultaneously.
At the national level, when crypto activities help with import settlements, foreign exchange access, or fund transfers, regulators tolerate or even embrace them—such as early domestic Bitcoin mining. Cryptocurrencies are also an important part of Iran’s “shadow financial network,” used for fund transfers and regulatory evasion.
According to TRM Labs, the company identified over 5,000 addresses linked to the Iranian Islamic Revolutionary Guard Corps (IRGC), estimating that since 2023, the organization has transferred about $3 billion worth of crypto. British blockchain research firm Elliptic reports that the Central Bank of Iran (CBI) had at least $507 million worth of USDT stablecoins in 2025.
But when cryptocurrencies are seen as accelerating rial devaluation, fueling capital flight, or creating unregulated private financial networks, the government quickly tightens controls.
In early 2025, Iran’s central bank (CBI) suddenly “stopped all rial payment channels for crypto exchanges,” leaving over 10 million users unable to buy Bitcoin and other assets with rial. Reports suggest one goal was to prevent further rial devaluation and stop the currency from being rapidly exchanged into foreign currencies or stablecoins via exchanges.
This move to cut off fiat currency entry essentially uses administrative measures to block the most convenient channel for converting rial into value. But it doesn’t mean society no longer needs crypto; instead, demand shifts to more gray, decentralized routes—over-the-counter trading, alternative payment accounts, or more discreet on-chain transfers.
Repeated government restrictions during currency crises tend to reinforce citizens’ preference for “off-system assets,” as each sudden restriction reminds them that financial rules can change at any time, and assets are not fully under personal control.
On the citizen level, crypto demand is driven by three factors: preservation of value, transferability, and speculation. TRM Labs estimates that 95% of Iran-related fund flows come from retail investors. Iran’s largest exchange, Nobitex, reports 11 million customers, mostly retail and small investors. The exchange states: “For many users, cryptocurrencies mainly serve as a store of value to cope with the ongoing devaluation of the national currency.”
More surprisingly, in mid-2024, Iran saw a nationwide craze over Telegram “Tap-to-Earn” crypto mini-games like Hamster Kombat and Notcoin. On Tehran’s metro and streets, countless Iranians frantically tapped their screens, trying to fight soaring prices through free “crypto airdrops.” Reports say nearly a quarter of Iran’s population participated. When the national currency loses trust, even clicking on screens for tiny virtual coins becomes a faint glimmer of hope in darkness.
Thus, a paradox emerges in Iran: authorities worry that crypto accelerates rial devaluation and weakens capital controls, so they cut off rial payment channels at critical moments; yet, in the long-term sanctions and forex shortages, crypto’s usability keeps proving itself. For ordinary Iranians, this usability is crucial—an emergency exit in a crisis-ridden life.
The covert power struggle over electricity and the rise of “black miners”
Unlike front-line conflicts with weapons, Iran has long been engaged in a silent underground war over electricity resources.
In a country with “scarce social resources,” electricity is no longer just a necessity but has been redefined as a strategic resource ripe for arbitrage. The cost of this arbitrage, however, is borne by ordinary residents, causing severe power shortages.
Despite being a major energy producer, Iran has long suffered from power shortages and rolling blackouts. The main reasons are underinvestment in infrastructure, aging generation and transmission systems, and demand surges driven by subsidies.
In summer 2025, Iran’s Tavanir publicly stated that crypto mining consumed nearly 2,000 MW of power—equivalent to two Bushehr nuclear reactors. More critically, mining accounted for about 5% of total electricity use but possibly 15–20% of the current power shortfall.
Tavanir also reported that during a cyberattack related to Israel, national electricity demand dropped by about 2,400 MW; they partly attributed this to large-scale illegal mining equipment going offline, involving around 900,000 illegal devices—indirect evidence of underground mining scale.
Tehran’s power distribution chief also said Iran has become the world’s fourth-largest crypto mining hub, with over 95% of active miners operating illegally—an “illegal mining paradise.” This shifts responsibility from the government to ordinary citizens.
Despite recent crackdowns, illegal mining has only increased, transforming from fringe activity into a structural industry. Behind it are not only electricity arbitrage but also gray protection, law enforcement rent-seeking, and complex local interest networks—deeply entrenching privilege.
Religious sites like mosques and military-controlled industrial zones enjoy free mining power.
“Ordinary citizens and private companies cannot access the electricity needed to operate and cool such large-scale mining equipment,” industry insiders say. Only industrial-scale operations can cause such massive power consumption.
Multiple media and investigations reveal that Iran’s privileged classes dominate this power feast. Religious sites like mosques, legally enjoying extremely cheap or free electricity, have become “underground mines.” Meanwhile, military industrial zones and secret facilities often hide massive mining farms. When elites exploit free “state electricity” to mine Bitcoin, ordinary residents burdened with high inflation can barely keep their fans running on hot summer nights.
Ultimately, Iran’s power crisis and illegal mining are not just security issues but a struggle over subsidized resources, currency devaluation, and survival pressures. Power outages leave a lasting impact on families’ summer nights.
In the current context of endless regional conflicts and political uncertainty, Iran’s economy faces dark clouds again.
