As the US-Israeli coalition escalates military actions against Iran, Tehran’s years-long “shadow economy” has once again become an international focus. This parallel system, combining Bitcoin mining and stablecoin trading, has become Iran’s last shield in seeking survival outside the battered banking system and dollar dominance.
Exchanging cheap electricity for Bitcoin
Iran legalized cryptocurrency mining as early as 2019, allowing licensed operators to mine using government-subsidized electricity on the condition that all mined Bitcoin must be sold to the Central Bank of Iran. This has become an important tool for paying for imported goods and settling foreign trade, effectively bypassing the US dollar system and Western banking sanctions to some extent.
According to statistics, Iran’s Bitcoin mining hash rate accounts for about 2% to 5% of the global total, but much mining activity remains unofficial, so the actual scale may be higher than reported.
Blockchain analytics firm Chainalysis found that Iran’s cryptocurrency ecosystem had grown to a $7.8 billion scale by 2025, nearly equivalent to the GDP of Maldives or Liechtenstein. Notably, crypto activity tends to spike during military conflicts or domestic unrest, including during last year’s 12-day conflict between Iran and Israel.
As Iran’s main military force, the Islamic Revolutionary Guard Corps (IRGC) has increasingly relied on cryptocurrencies in recent years. Chainalysis estimates that in Q4 2025, wallets associated with the IRGC accounted for over 50% of Iran’s total cryptocurrency inflows, receiving assets worth over $3 billion last year.
These figures only include publicly known wallet addresses directly linked to sanctions lists; the actual scale could be higher.
Rial plummets 96%, USDT becomes the new favorite for trade settlement
Besides Bitcoin, stablecoins also play a key role. Elliptic, a blockchain analysis firm, indicated that by 2025, Iran’s central bank had accumulated at least $507 million in USDT, likely used to stabilize the Rial exchange rate and support foreign trade. However, this financial defense appears to have been largely ineffective, as the Rial has depreciated over 96% against the US dollar.
Faced with deep-rooted hyperinflation and an economy on the brink of collapse, ordinary Iranians are increasingly turning to Bitcoin. Data shows that during recent anti-government protests, the amount of Bitcoin withdrawn from centralized exchanges to personal wallets surged sharply, indicating that locals are trying to keep their assets under their own control.
Mining costs are only about $1,300 per Bitcoin
Estimates suggest that the cost of mining one Bitcoin in Iran is around $1,300. Miners sell the mined Bitcoin to the central bank, which then transfers funds overseas to pay for equipment, fuel, or daily necessities.
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