Bitcoin (BTC) has become an element of resistance in Iran primarily because its censorship-resistant and self-custodial nature allows both citizens and state-affiliated entities to operate outside a failing, government-controlled, and internationally sanctioned financial system.
Public Use
For ordinary Iranians, Bitcoin offers a critical financial lifeline amid severe economic instability, including persistent inflation above 40% and a rapidly collapsing rial. Its role includes:
Capital Preservation: Bitcoin serves as a relatively safe haven asset to store value and hedge against the drastic depreciation of the national currency, which has lost nearly all its value against major currencies like the dollar.
Financial Flexibility: Unlike traditional assets subject to government control and potential freezes, Bitcoin's decentralized nature provides liquidity and optionality, allowing individuals to operate outside official channels and secure their savings in personal wallets. This behavior, particularly the surge in withdrawals from exchanges to personal wallets during protests and internet blackouts, is a rational response to a loss of trust in state-controlled institutions.
Government and State-Affiliated Use
The Iranian government and entities like the Islamic Revolutionary Guard Corps (IRGC) also leverage cryptocurrencies to circumvent international sanctions.
Sanctions Evasion: Iran uses its abundant energy resources to power licensed Bitcoin mining operations and converts the mined cryptocurrency into funds for paying for imports, effectively exporting energy while bypassing traditional banking restrictions.
Funding Operations: IRGC-associated addresses have moved billions of dollars in crypto through various exchanges to finance activities and support proxy networks across the Middle East, demonstrating its use as a sophisticated tool for statecraft and moving capital.
While practical barriers to widespread adoption remain, such as price volatility and regulatory uncertainty, Bitcoin continues to feature prominently in discussions and practical applications as a parallel economic system.
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