Iranians Turn to Crypto as Economic Crisis and Sanctions Deepen

Iran’s cryptocurrency ecosystem reached nearly $7.78 billion in 2025, driven by a surge in digital asset activity amid economic instability and geopolitical tensions according to Chainalysis data. The Islamic Revolutionary Guard Corps (IRGC) played a significant role, with its affiliated wallets receiving about half of the total value in the fourth quarter as reported. As the Iranian rial collapsed and inflation exceeded 40%, citizens increasingly turned to crypto as a financial alternative according to Cointelegraph.

Bitcoin withdrawals to personal wallets surged during recent mass protests, with Chainalysis noting a pronounced increase in activity as citizens sought to protect their assets according to Chainalysis. These actions reflect a "flight to safety" amid economic and political uncertainty, with users prioritizing self-custody over traditional banking as reported.

The rise in crypto use has coincided with major events in Iran, including cyber incidents, regional conflicts, and protests. For example, during late 2025, daily transfers and transaction values spiked following widespread demonstrations and internet shutdowns according to Cointelegraph.

Why Did This Happen?

The Iranian rial hit historic lows against the U.S. dollar in early 2026, reaching exchange rates of 1.4 to 1.5 million rials per dollar as reported. This collapse, paired with inflation above 40%, eroded purchasing power and led to widespread protests according to Investing.com analysis. As trust in the local currency waned, many Iranians sought alternatives to preserve their wealth according to Chainalysis.

Chainalysis noted that cryptocurrency adoption in Iran often surges during periods of instability, including the Kerman bombings in 2024 and the June 2025 war. During these times, digital assets provided a way to bypass government controls and protect value according to Bitget.

Meanwhile, TRM Labs reported that two UK-registered entities processed roughly $1 billion in funds linked to the IRGC, raising concerns about sanctions evasion according to The Block. The Financial Times also highlighted Iran’s exploration of crypto payments for weapon sales, further emphasizing the role of digital assets in state activity according to The Block.

What This Means for the Future of Iranian Crypto

Bitcoin’s self-custodial and censorship-resistant features make it a valuable tool for Iranians seeking financial flexibility. Unlike traditional assets that are vulnerable to government control, BTC offers an alternative during times of economic and political turmoil according to Bitget.

Chainalysis expects crypto to remain a critical tool for Iranians navigating economic instability and sanctions. The firm said its findings align with broader global trends, where BTC withdrawals surge in regions affected by war, economic collapse, or government crackdowns according to Bitget.

Analysts also noted that while crypto has become a financial lifeline for ordinary citizens, it has also facilitated illicit activity and sanctions evasion by state actors. This duality suggests a complex future for Iran’s crypto ecosystem, where financial sovereignty and regulatory scrutiny will remain intertwined according to Bitget.