Cryptocurrency in Iran has emerged as a pivotal response to economic pressures and global isolation.

Iran Iran, officially the Islamic Republic of Iran (IRI) and also known as Persia, is a country in West Asia. It borders Iraq to the west, Turkey, Azerbaijan, and Armenia to the northwest, the Caspian Sea to the north, Turkmenistan to the nort ...

's interest in

cryptocurrencies A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. Individual coin ownership records ...

began in 2017 when international sanctions obstructed Iran's access to the global financial markets. Iran's cryptocurrency market faces challenges like high energy costs and the involvement of the

Islamic Revolutionary Guard Corps The Islamic Revolutionary Guard Corps (IRGC), also known as the Iranian Revolutionary Guards, is a multi-service primary branch of the Islamic Republic of Iran Armed Forces, Iranian Armed Forces. It was officially established by Ruhollah Khom ...

in illicit activities. On December 27th 2024 Iranian regime's Central Bank's new program effectively blocked all Iranian cryptocurrency to rial and vice versa payments through internet websites in Iran.January 2025 the central bank began unblocking cryptomoney to fiat traders exchanges with their own government API for full access to user data.

Historical context and market development

Iran's interest in cryptocurrencies has grown since 2017 when

international sanctions International sanctions are political and economic decisions that are part of diplomatic efforts by countries, multilateral or regional organizations against states or organizations either to protect national security interests, or to protect i ...

severely obstructed Iran's access to the international financial system. This resulted in a growing reliance on

Bitcoin Bitcoin (abbreviation: BTC; Currency symbol, sign: ₿) is the first Decentralized application, decentralized cryptocurrency. Based on a free-market ideology, bitcoin was invented in 2008 when an unknown entity published a white paper under ...

and other

digital currencies Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital cu ...

as alternative methods to bypass the sanctions.Tayebi, A. (2022). ''Iran Approves Cryptocurrency Regulations, Raising Fears Of Skirting Sanctions''. RFE/RL's Radio Farda
Iran Approves Cryptocurrency Regulations, Raising Fears Of Skirting Sanctions
/ref>TRM. (2023). ''Iran's Crypto Economy''. TRM Insights
Iran's Crypto Economy
/ref> In 2019, the government legalized cryptocurrency mining under specific conditions. This decision was partly influenced by Iran's huge energy resources, which made mining lucrative despite the fact that digital currencies mining is energy-intensive.Cryptocurrency.Law. (2023)
Cryptocurrency Regulatory Developments in Iran: 2024 Update
/ref>

Regulatory framework

Mining regulations

Iran legalized cryptocurrency mining in 2019, recognizing the potential for revenue generation amidst economic sanctions. However, the legalization came with heavy regulations, including requiring miners to sell their digital assets directly to the

Central Bank of Iran The Central Bank of the Islamic Republic of Iran (CBI; ; SWIFT Code: BMJIIRTH), also known as ''Bank Markazi'', was established under the Iranian Banking and Monetary Act in 1960. It serves as the banker to the Iranian government and has the e ...

(CBI). Licensed miners are also subjected to high energy tariffs, which have made mining financially unsustainable for many. This has led a significant portion of Iran's mining activities to go underground.

Exchanges and transactional controls

Iranian cryptocurrency exchanges such as Nobitex have been increasingly popular among citizens. However, these exchanges operate under stringent regulations. The Central Bank prohibits the use of foreign-mined cryptocurrencies for domestic transactions, reinforcing government control over the digital currency market. Despite these measures, many Iranians utilize

virtual private network Virtual private network (VPN) is a network architecture for virtually extending a private network (i.e. any computer network which is not the public Internet) across one or multiple other networks which are either untrusted (as they are not con ...

s (VPNs) to access foreign exchanges, circumventing local restrictions and avoiding scrutiny.

Mining sector and energy challenges

Bitcoin mining is highly

energy Energy () is the physical quantity, quantitative physical property, property that is transferred to a physical body, body or to a physical system, recognizable in the performance of Work (thermodynamics), work and in the form of heat and l ...

-intensive, requiring substantial electrical resources. Iran's power grid is both fragile and costly to maintain, with frequent outages and a loss of about 13% of electricity during transmission. Licensed miners must pay premium rates for electricity, pushing many to abandon legal operations for underground, unlicensed mining. As a result, Iran's share in global Bitcoin mining has decreased from 4.5% in 2021 to around 3.1% in 2024.

Central Bank of Iran's blockchain projects

In recent years, the Central Bank of Iran has shown a growing interest in

blockchain technology The blockchain is a distributed ledger with growing lists of records (''blocks'') that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (g ...

. Notably, the development of the Borna blockchain platform was launched in conjunction with Areatak, an Iranian blockchain solutions provider, to create a digital framework for Iran's banking and financial sectors. This project, along with the Kuknos Network, reflects the government's efforts to capitalize on blockchain technologies while maintaining strict control over digital assets.

Adoption and public perception

With

inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...

rates soaring, many Iranians have turned to cryptocurrencies as a means of preserving wealth. Alongside more traditional assets such as gold and foreign currencies, Bitcoin and other digital currencies have gained popularity among citizens looking to protect their savings from the devaluation of the Iranian Rial.

The role of the IRGC in Iran's cryptocurrency market

International sanctions have significantly limited Iran's access to global financial markets, pushing state-linked entities such as the IRGC to find alternative channels for transactions. Cryptocurrencies, particularly Bitcoin, have provided the IRGC with an effective way to bypass traditional banking restrictions and move money across borders. The decentralized nature of cryptocurrencies makes them difficult to trace, allowing the IRGC and affiliated groups to use them for sanction evasion and illicit activities. In 2022, the U.S. Treasury's Office of Foreign Assets Control (OFAC) sanctioned two Iranian individuals, Amir Hossein Nikaeen Ravari and Ahmad Khatibi Aghada, both linked to the IRGC. These individuals were involved in cyber-related activities and used cryptocurrency to funnel funds into Iran through local exchanges.

2025 Nobitex hack

On June 18, 2025, it was reported that a group called Gonjeshke Darande (also called "Predatory Sparrow") stole $90 million in digital assets from the Iranian Nobitex cryptocurrency exchange. Gonjeshke Darande, which may have links to Israel, appears to have been motivated by Israeli missile attacks on Iran several days prior.{{Cite web , date=2025-06-19 , title=Hackers say they wiped out $90 million from Iran cryptocurrency exchange , url=https://apnews.com/article/iran-israel-cryptocurrency-hack-data-leak-8febb3c9c2acf4de2894a7a8a92aa88c , access-date=2025-06-23 , website=AP News , language=en

References

Islamic Revolutionary Guard Corps Economy of Iran Digital currencies