The Iranian regime's decision to accept cryptocurrency payments from cargo ships traversing the Strait of Hormuz is consistent with its existing trade networks that circumvent sanctions. According to a spokesperson for Iran's Oil, Gas and Petrochemical Products Exporters' Union, bitcoin is now an accepted payment method, while previous reports indicated the use of stablecoins for a select few oil tankers, with a fee of $1 per barrel of oil.
This development is part of a broader trend, as the Iranian regime, particularly the Islamic Revolutionary Guard Corps (IRGC), has been leveraging cryptocurrency to facilitate cross-border trade, including oil sales, as per Chainalysis data. Experts like Andrew Fierman, head of national security intelligence at Chainalysis, find this move unsurprising, given the regime's growing and complex network of crypto wallets.
Over the last year and a half, sanctioned activity has shown significant cryptocurrency transactions, including a U.S.-sanctioned IRGC-affiliated financier involved in Iranian oil sales to Yemen, totaling over $178 million in transfers. Furthermore, the IRGC's adoption of cryptocurrency, especially stablecoins, for cross-border trade is seen as a strategic move to evade sanctions and access US dollar-pegged assets, which are crucial for international trade.
Tom Keatinge, founding director of the Centre for Finance and Security at RUSI, agrees that USD-backed stablecoins have become a vital payment mechanism for the Iranian regime, allowing it to bypass traditional banking systems and sanctions. The use of stablecoins, such as the USD1, could further facilitate the regime's sanctions-skirting goals, with some experts suggesting that demanding payment in such stablecoins could create a financial incentive for the US to lift sanctions.