Geopolitical Tensions Highlight Iran’s $7.8B Alternative Crypto Economy

• Iran operated a parallel crypto economy to escape international sanctions.
• Iran’s crypto ecosystem hit $7.78B in 2025 and accounts for 2–5% of mining power.
• Bitcoin miners used Iran’s subsidized electricity and sold BTC to the central bank.

The ongoing war in Iran, highlighted by intensified airstrikes by Israel and the US, has brought the country’s cryptocurrency activities into the spotlight. This has highlighted Tehran’s use of cryptocurrency as an alternative to its heavily sanctioned banking system.

Iran’s Bitcoin Program

Iran turned to Bitcoin mining and a fast-growing stablecoin economy to escape the influence of international entities. While the government explored cryptocurrency for international trades, ordinary Iranians used it as a channel for transactions during protests and economic crises.

It is worth noting that Iran legalized cryptocurrency mining within its region in 2019. The Asian nation designed the mining program to allow licensed entities to use subsidized electricity for mining operations, provided they sell their mined Bitcoins to the central bank. The bank used the acquired BTC to pay for imports and settle trades outside the dollar system.

According to reports, Iran accounted for an estimated 2-5% of global Bitcoin mining power, with most of its operations conducted in secret. Meanwhile, Chainalysis blockchain analytics revealed that cryptocurrency activities in Iran reached $7.78 billion in 2025, reflecting a notable improvement from the previous year.

US-Israel Strategic Infrastructure Target in Iran

Chainalysis further revealed that crypto activity in Iran often spiked during periods of military engagements or domestic unrest. It highlights a consistent pattern and the link between the use of cryptocurrency as an alternative economic tool during critical moments.

The recent bombardment by Israel and the US, which has affected Iran’s electricity infrastructure, is bound to take a toll on the region’s crypto activity, considering how much the government and other miners depend on the national grid for energy supply. Analysts consider targeting the power infrastructure strategic, since the Islamic Revolutionary Guard Corps (IRGC), the primary branch of the country’s military, is highly involved in the crypto ecosystem.

Chainalysis’s report reveals that IRGC-linked addresses accounted for more than 50% of total Iranian crypto inflows in the fourth quarter of 2025, with over $3 billion in value received last year. Attacking Iran’s crypto infrastructure could represent a major strategy by Israel and the US in the ongoing war, and could significantly affect the global cryptocurrency network.

Related: $1 Billion Bitcoin Operation at Risk if Iran’s Grid Goes Dark