Study reveals significant rise in Iranian Bitcoin usage during countrywide protests
on worth of illicit financial use.
Unrest has persisted in Iran since late December, with protesters voicing frustrations over the devaluation of the Iranian rial and other economic challenges. These grievances are compounded by systemic issues such as corruption, repression, and governmental mismanagement. In this context, the utilization of Bitcoin can be interpreted as a form of resistance, with individuals opting to circumvent the traditional financial system. Interestingly, the same report from Chainalysis revealed that the Islamic Revolutionary Guard Corps (IRGC) is responsible for approximately half of all crypto activity in Iran, amounting to an estimated $7.78 billion. Furthermore, findings from TRM Labs linked two crypto exchanges in the United Kingdom to the Iranian regime, raising concerns about potential misuse of digital assets.
The situation in Iran underscores the dilemma faced by authoritarian regimes worldwide when it comes to Bitcoin. While the technology enables regimes to evade restrictions within the US-controlled global banking system, it also provides avenues for greater financial autonomy for the local populace. Bitcoin is not the sole technological tool aiding Iranians during protests; access to Starlink has facilitated information dissemination amidst government-imposed internet restrictions. Mesh-networking platforms like Bitchat have gained traction in other conflict zones, while a modified version called Noghteha has gained popularity in Iran. However, Noghteha’s closed-source nature and donation practices have generated controversy.
The recent surge in Bitcoin adoption in Iran is part of a larger trend observed globally in regions experiencing turmoil, economic volatility, or political crackdowns. Chainalysis’ previous reports have highlighted increased cryptocurrency usage in Ukraine during conflict with Russia, as well as in Argentina and Venezuela following currency devaluations. Notably, countries like Venezuela and Russia have leveraged Bitcoin and stablecoins like Tether’s USDT to evade economic sanctions, contributing to a significant spike in illicit financial activity.
In conclusion, the escalating adoption of Bitcoin in Iran amidst widespread unrest illustrates a growing reliance on decentralized financial systems in times of crisis. As citizens seek refuge from economic instability and government control, Bitcoin emerges as a valuable tool for financial autonomy and resistance. Despite concerns surrounding potential government misuse of digital assets, the trend of embracing cryptocurrencies in conflict-ridden regions underscores the evolving landscape of financial transactions and the role of digital currencies in empowering individuals facing political and economic uncertainties.
