Iran's use of cryptocurrency for toll payments from ships traversing the Strait of Hormuz is a strategic move that aligns with its existing trade networks designed to circumvent sanctions. According to a spokesperson for Iran's Oil, Gas and Petrochemical Products Exporters' Union, bitcoin is now accepted as a payment method, with previous reports suggesting stablecoins were also being used. The fee for this service is $1 per barrel of oil, with the largest tankers capable of carrying up to two million barrels.
This development is part of a broader trend where the Iranian regime, particularly the Islamic Revolutionary Guard Corps (IRGC), has increasingly utilized cryptocurrency to facilitate cross-border trade, including oil sales, as indicated by data from blockchain analytics firm Chainalysis. Andrew Fierman, head of national security intelligence at Chainalysis, notes that this move is unsurprising given the regime's history of leveraging cryptocurrency for commercial trade. Over the last year and a half, there has been a notable increase in sanctioned activity involving crypto wallets, including a U.S.-sanctioned IRGC-affiliated financier who facilitated Iranian oil sales to Yemen, resulting in transfers of over $178 million. Furthermore, a network of Houthi financiers purchased weapons and commodities from Russia using cryptocurrency addresses, accounting for nearly a billion dollars in activity.
The use of cryptocurrency by the IRGC-affiliated networks for cross-border trade is complex and established, involving a network of wallets that facilitate activity without the need for traditional banking systems or cryptocurrency exchanges. This approach is distinct from North Korea's focus on stealing and laundering cryptocurrency. The Iranian regime's adoption of stablecoins as a payment mechanism for cross-border trade is crucial given the comprehensive sanctions imposed since 1979, which limit its access to U.S. dollar-pegged assets.
The ability to use USD-backed stablecoins creates an alternative mechanism for global trade, avoiding the challenges associated with trading in Rials or Tomans, the local currencies. Experts agree that USD-backed stablecoins have become an important payment mechanism for the Iranian regime, allowing it to evade sanctions and western banking controls. While there is a risk of Western regulatory intervention, evidence suggests this risk is low. Some suggest that Iran could further its goals by demanding payment in specific stablecoins, potentially creating a financial incentive for the lifting of sanctions.