Iran Eases Foreign Exchange Controls, Turns to Cryptocurrency for Cross-Border Trade

On September 9, Iran is gradually easing its strict foreign exchange controls and allowing businesses to use cryptocurrencies, particularly Tether (USDT) and Bitcoin, for cross-border transactions to cope with the impact of U.S. sanctions and the war on its economy and financial system.

Insiders say that the Central Bank of Iran has quietly encouraged businesses in recent months to repatriate overseas funds through various means, including settling cross-border trade via local cryptocurrency exchanges. At the same time, companies can exchange foreign currency on the open market and use export revenues directly for importing goods without having to go through the official foreign exchange system entirely.

An executive close to the Iranian regime stated that the central bank is currently not questioning how funds are transferred, "Using cryptocurrencies to receive export payments has completely become the norm."

Data shows that by 2025, approximately $10 billion worth of cryptocurrencies will flow through Iran. Blockchain analytics firms estimate that Iran accounts for about 4.5% of global Bitcoin mining activity, leveraging cheap energy for Bitcoin mining, allowing it to acquire crypto assets that can be used for importing goods and circumventing trade restrictions.

Meanwhile, there are still over $100 billion in undeclared overseas and domestic earnings within Iran. The country’s highest auditing body previously stated that more than 20,000 individuals and companies have failed to fulfill their obligation to repatriate approximately €94 billion in export revenues.

As the U.S. further tightens its blockade on Iran's financial channels, cryptocurrencies are becoming an important tool for Iran to maintain cross-border trade and access external funds. However, industry insiders in Iran believe that the scale of cryptocurrency trading is still insufficient to meet the country's massive economic needs.

Previously, about $344 million in wallet assets related to the Central Bank of Iran were frozen, and the U.S. Treasury has warned that engaging in digital asset transactions with Iran may face sanctions risks.