Iran's Growing Reliance on Cryptocurrencies Amid Economic Turmoil
By: Isha Das
The economic landscape in Iran is witnessing a significant shift as the country's citizens increasingly turn to cryptocurrencies in response to mounting financial pressures. With the Iranian rial losing approximately 90% of its value against the U.S. dollar since 2018, coupled with persistent inflation rates fluctuating between 40% and 50%, the populace is seeking refuge in the virtual currency realm. According to data from blockchain analytics firm Chainalysis, Iran's cryptocurrency footprint expanded significantly in 2025, reaching an estimated value of $7.78 billion, as economic sanctions, high inflation, and the weakening currency tightened the financial room.
The use of Bitcoin and other cryptocurrencies saw a substantial surge during mass protests that erupted in late December 2025. These demonstrations were sparked by rising living costs and the devaluation of the national currency. In a bid to stifle dissent, authorities resorted to internet shutdowns and stringent financial controls. Despite these measures, blockchain data indicated a marked increase in average daily transaction values, with smaller, individual transactions and larger transfers becoming more frequent as both citizens and businesses sought to move assets beyond government reach. Bitcoin's decentralized nature allows for storage and transfer independent of traditional banking systems, which are heavily overseen by the state, making it an attractive option for those looking to preserve capital in periods of economic instability.
Interestingly, the surge in cryptocurrency usage is not solely confined to the general populace. State-linked entities, including accounts affiliated with the Islamic Revolutionary Guard Corps (IRGC), are also actively engaging in the cryptocurrency sphere. The IRGC-associated wallets reportedly managed transactions amounting to over $3 billion in 2025, representing more than half of the nation's crypto activity during the final quarter. These transactions are believed by Western authorities to potentially serve as a mechanism to circumvent sanctions, facilitating cross-border fund transfers in an otherwise restricted geopolitical climate.
This dual role of cryptocurrencies in Iran underscores their growing importance as both a livelihood tool and a strategic financial instrument. During political upheavals and security incidents, such as missile strikes and conflicts that directly impacted the national digital finance infrastructure, there were notable spikes in crypto activities. For many Iranians, cryptocurrencies have evolved from being speculative investments to becoming essential survival assets amidst persistent economic strain. As the geopolitical environment remains fraught, analysts predict that the reliance on digital currencies will likely continue to escalate, marking a pivotal transformation in Iran's financial dynamics.
