Iran increases its use of Bitcoin for ships traveling through the Strait of Hormuz
May 18, 2026
In recent news from Iran, reports indicate that the country is implementing an insurance program designed for vessels journeying through the strategic Strait of Hormuz. What makes this program stand out is that claims will be paid out using Bitcoin, a virtual currency that has gained increasing popularity and recognition worldwide. This initiative comes on the heels of an earlier proposal to collect toll payments in Bitcoin for safe passage and the recent seizure of $344 million worth of USDT stablecoin linked to the Iranian government.
The decision to incorporate Bitcoin into the insurance scheme is significant, especially in light of the seizure of USDT stablecoins. This move may suggest that Iran is steering clear of digital currencies that pose counterparty risks, a concern that Bitcoin was originally developed to mitigate. A report by Elliptic, a blockchain analytics company, highlighted that the Iranian central bank had leveraged USDT to stabilize the Iranian rial and facilitate international trade transactions. Similarly, the Wall Street Journal previously reported on the Maduro regime in Venezuela utilizing USDT, coinciding with a substantial asset freeze executed by Tether. The unveiling of Iran’s insurance plan details a system named Hormuz Safe, supported by the Ministry of Economy and the Persian Gulf Strait Authority. Specifically tailored for cargo shipments traversing the Persian Gulf and Strait of Hormuz, the service extends policies and liability certificates covering a spectrum of lower-risk incidents like vessel inspections, detentions, and confiscations.
Shippers engaging with the scheme are required to pay premiums in Bitcoin or other cryptocurrencies. Upon confirmation of payment, they obtain signed receipts with encrypted verification. The noteworthy aspect of this program is that claims are settled directly via blockchain, ensuring a quick and transparent process. Iranian authorities anticipate that this initiative could yield over $10 billion in annual revenue while offering a viable alternative to support shipping activities amid ongoing sanctions and recent regional strife.
Despite these optimistic projections, Iran’s insurance plan has received its fair share of criticism. Many in the shipping industry view it as yet another transit charge or a disguised iteration of the previous toll proposal, which entailed fees of up to $2 million per trip or roughly $1 per barrel of oil. According to regulations outlined in the United Nations Convention on the Law of the Sea, unilateral levies on ships traversing international straits are prohibited. Doubts have also been raised regarding Iran’s capacity to finance such an insurance scheme using Bitcoin, given the country’s restricted access to global financial and insurance markets due to sanctions.
Abdul Khalique, the head of the Liverpool John Moores University Maritime Centre, expressed concerns over the need for substantial reserves and international reinsurance support in marine insurance, issues that Iran may struggle with due to sanctions. Asserting that shipowners could harbor doubts about claims being honored in the event of accidents, spills, or seizures without credible reinsurance, Khalique emphasized the challenges faced by Iran. Rob Hamilton, CEO of AnchorWatch, a bitcoin insurance company, echoed this sentiment, questioning Iran’s bitcoin reserves and ability to underwrite risks associated with valuable cargoes. Additionally, Hamilton criticized the arrangement, suggesting that Iran’s approach could be likened to playing both the arsonist and the firefighter, further undermining trust and credibility.
The move to adopt Bitcoin in this scenario underscores a growing comprehension of the technology’s potential within the global market. While decentralized cryptocurrencies like Bitcoin offer users more autonomy over their digital finances, there is increasing tension within the industry between those advocating for true decentralization and those opting for centralized shortcuts, such as stablecoins, to enhance mainstream appeal. However, in certain instances, decentralization is imperative, as evidenced by North Korea’s tendency to convert alleged crypto hacking proceeds into bitcoin to safeguard their assets from potential seizures. Notably, North Korean operatives resorted to Thorchain following the Bybit and KelpDAO hacks to convert illicit funds into bitcoin. Despite the adoption of bitcoin by nations like Iran, Venezuela, and North Korea, it is recognized as a legitimate reserve asset by the U.S. federal government, multiple states, and numerous traditional financial institutions.
