New U.S. and Israeli strikes against Iran have focused new attention on a financial network that Tehran has built alongside its ailing banking system: Bitcoin mining and a rapidly growing stable economy.
Iran legalized cryptocurrency mining in 2019, allowing licensed operators to use subsidized electricity in exchange for selling mined BTC to the central bank. Bitcoin has served as a tool to pay for imports and settle trade outside the dollar system, even indirectly.
Estimates in recent years place Iran’s share of global bitcoin mining power at between 2% and 5%, although much of the activity takes place out of the public eye.
Blockchain analytics firm Chainalysis found that Iran’s crypto ecosystem reached $7.78 billion in 2025, growing faster than the previous year. This figure is as large as the GDP of certain small countries like the Maldives or Liechtenstein.
Activity has often spiked during military clashes and domestic unrest, including during the 12-day conflict with Israel last year, according to Chainalysis.
The Islamic Revolutionary Guard Corps (IRGC), the main branch of the country’s military, has since deepened its role in space. Chainalysis estimates that IRGC-linked addresses accounted for more than 50% of total Iranian crypto flows in Q4 2025, with more than $3 billion in value received last year.
These figures only reflect wallets publicly linked to sanctions lists, suggesting that the actual footprint may be larger.
Adoption mechanisms
Stablecoins also play a key role.
A separate analysis by Elliptic found that Iran’s central bank has accumulated at least $507 million in USDT in 2025, which is likely to stabilize the rial and finance trade. This effort has essentially failed, with data showing the rial has lost more than 96% of its value against the dollar.
At the same time, ordinary Iranians have turned to bitcoin. During recent protests and an internet outage, withdrawals from local exchanges to personal wallets increased sharply.
Read more: Iranian rial collapse reflects Lebanon crisis, pushing citizens toward bitcoin
If the conflict disrupts power grids, mining production could fall in the short term. The Iranian state is believed to mine BTC at around $1,300 per coin, which it then resells at current market prices. It is unclear whether the state has kept any bitcoin reserves, as there is no cash dashboard or official disclosure of holdings.
In practice, mining turns cheap domestic energy into an asset that can cross borders. A licensed miner creates new bitcoins and then sends them to the Iranian central bank. The bank can then transfer it to a foreign counterparty to pay for machinery, fuel or consumer goods without routing the funds to U.S.-controlled banks.
As long as transactions are settled on a public blockchain, counterparties can remain opaque.
The same pattern appears in stablecoins. USDT, which is pegged to the dollar, has become a standard settlement tool in sanctioned economies because it offers price stability and faster transfers than Bitcoin.
However, it is not always easy to hide such transactions. Cryptocurrency exchange Binance recently found itself embroiled in accusations that it fired investigators who raised concerns about the transfer of funds through the exchange to sanctioned, Iran-linked entities. This led nine Democratic US senators to call on Treasury and the DOJ to investigate Binance’s illicit financial controls.
Geopolitical risks
Data from Chainalysis shows that Iranian crypto activity correlates with political flashpoints, including missile exchanges and internal protests. During periods of unrest, exchange outflows increase as users withdraw funds to private wallets.
For the IRGC, crypto offers another channel to move value across its affiliate network and business fronts. Chainalysis reported that flows to IRGC-linked addresses totaled $2 billion in 2024 and exceeded $3 billion in 2025.
The resumption of the military campaign, which saw the IRGC retaliate against US bases in various Middle Eastern countries, adds new risk to this system. Large mining operations require constant energy. Iran has imposed seasonal bans in the past to ease pressure on the network.
A prolonged conflict that damages infrastructure could reduce the hash rate or mining capacity tied to the country, although the global Bitcoin network would likely adjust over time as miners elsewhere take over.
