Bank failures, war conflicts: Iran's $7.8 billion cryptocurrency "shadow economy" becomes the focus again

As the US-Israel coalition escalates military actions against Iran, Tehran’s years-long “shadow economy” has once again become an international focus. This parallel system, combining Bitcoin mining and stablecoin trading, has become Iran’s last shield in seeking survival outside the battered banking system and dollar dominance.

Using cheap electricity to mine Bitcoin
Iran legalized cryptocurrency mining as early as 2019, allowing licensed operators to use government-subsidized electricity for mining. The condition is that all mined Bitcoin must be sold to the Central Bank of Iran, becoming an important tool for paying for imports and settling foreign trade. To some extent, this bypasses the dollar system and Western banking sanctions.

According to statistics, Iran’s Bitcoin hash rate accounts for about 2% to 5% of the global total, but many mining activities are not fully disclosed, so the actual scale may be higher than the figures suggest.
Blockchain analytics firm Chainalysis found that Iran’s cryptocurrency ecosystem had grown to a $7.8 billion scale by 2025, nearly equivalent to the GDP of Maldives or Liechtenstein. Notably, crypto activity tends to surge during military conflicts or domestic unrest, including during the 12-day conflict between Iran and Israel last year.

As Iran’s main military force, the Islamic Revolutionary Guard Corps (IRGC) has increasingly relied on cryptocurrencies in recent years. Chainalysis estimates that in Q4 2025, wallets associated with the IRGC accounted for over 50% of Iran’s total cryptocurrency inflows, receiving assets worth over $3 billion last year.
These figures only include publicly known wallet addresses directly related to sanctions lists; the actual scale could be higher.

Rial plummets 96%, USDT becomes the new favorite for trade settlement
In addition to Bitcoin, stablecoins also play a key role. Blockchain analysis firm Elliptic indicated that by 2025, the Central Bank of Iran had accumulated at least $507 million in USDT, likely used to stabilize the Rial exchange rate and support foreign trade. However, this financial defense seems to have had limited success. Data shows the Rial has depreciated over 96% against the US dollar.

Faced with deep-rooted hyperinflation and an economy on the brink of collapse, ordinary Iranians are also turning to Bitcoin for asset preservation. Data shows that during recent anti-government protests, the amount of Bitcoin withdrawn from centralized exchanges to personal wallets surged sharply, indicating locals’ efforts to keep assets under their control.

Mining costs are only about $1,300 per Bitcoin
External estimates suggest that the cost of mining a Bitcoin in Iran is around $1,300. Miners sell the mined Bitcoin to the central bank, which then transfers funds overseas to pay for equipment, fuel, or daily necessities.