Iran Expands Sanctions-Evading Trade Network with Crypto Payments for Tanker Toll

The Iranian government's decision to accept cryptocurrency payments from cargo ships passing through the Strait of Hormuz is a strategic move to bypass sanctions. Experts believe this development is consistent with Tehran's existing trade networks that skirt sanctions.

A spokesperson for Iran's Oil, Gas and Petrochemical Products Exporters' Union recently confirmed that bitcoin is being accepted as a payment method, with a fee of $1 per barrel of oil. This move is seen as a bold step, but it aligns with the Iranian regime's increasing use of cryptocurrency to facilitate cross-border trade, particularly with oil sales, as reported by blockchain analytics firm Chainalysis. According to Andrew Fierman, head of national security intelligence at Chainalysis, 'it's highly unsurprising that this type of trade would be happening via cryptocurrency.' The Islamic Revolutionary Guard Corps (IRGC) has been using cryptocurrency to facilitate cross-border trade over the past few years, with a growing and complex network of crypto wallets.

In December 2024, a U.S.-sanctioned IRGC-affiliated financier was involved in Iranian oil sales to Yemen, with cryptocurrency addresses facilitating over $178 million in transfers. The IRGC's use of cryptocurrency is a more complex and established system than previously thought, with a network of wallets facilitating cross-border activity.

The adoption of cryptocurrency, particularly stablecoins, as a payment mechanism for cross-border trade is the inverse of North Korea's approach, which focuses on stealing and laundering crypto. The Iranian regime has been comprehensively sanctioned since 1979, making it challenging to access U.S. dollar-pegged assets and trade internationally.

The use of USD-backed stablecoins creates a mechanism for the regime to trade globally without relying on the traditional banking system. Experts, including Tom Keatinge and Lee Reiners, agree that USD-backed stablecoins have become an essential payment mechanism for the Iranian regime, allowing it to avoid sanctions and western banking controls.