Iran’s Rial Collapse Triggers Activity in Crypto Ecosystem
- Chainalysis report claims that Iranians are withdrawing Bitcoin from exchanges and stashing it in their personal wallets.
- To combat the currency crisis Irans’s Central Government has bought over $500 million in dollar-backed digital assets.
- Amid the geopolitical tensions, Iran’s crypto ecosystem has grown to nearly $7.78 billion in 2025.
According to a report by blockchain analytics company Elliptic, the Central Bank of Iran bought more than $500 million in dollar-backed digital assets in the past year to mitigate a currency crisis and bypass US sanctions. Iran has also begun offering cryptocurrency payments for overseas weapons contracts, signaling a shift in how sanctioned states conduct trade.
The current widespread battling movements have caused the Iranian rial to plummet by 90%, and this has created a new trend among the public. Chainalysis’s report provided insights into this matter.
As per the analysis, the Iranians are withdrawing Bitcoin from exchanges and storing it in their personal wallet. This act is a response to the ongoing currency crisis in the country. Moreover, the geopolitical uncertainty has become a contributor to the growth of the crypto ecosystem in Iran.
Iran’s crypto ecosystem has grown to nearly $7.78 billion in 2025, which is a fast-paced growth compared to the previous year. The IRGC (Islamic Revolutionary Guard Corps) on-chain activity alone contributed to over 50% of Iran’s total crypto ecosystem in Q4 of 2025.
Reports cite that Iran’s digital asset activity is tied to several major domestic and geopolitical events over the past couple of years. This includes the Kerman bombings in January 2024, Iran’s missile strikes against Israel in October 2024, and the 12-day Iran-Israel war in June 2025.
Related: Iran Rial Collapse Triggers Protests as Currency Hits Record
Cause of The Economic Collapse of Iran
The recent economic collapse has its roots starting from 1979. Since then, Iran was under various sanctions. The country faced enhanced international sanctions, including an arms embargo, trade controls, asset freezes, travel bans, and export restrictions between 2006 and 2010, due to its nuclear non-compliance.
During 2019 and 2020, the US santions was further extended to the finance and banking sector. The issues of Iran further worsened when U.S. President Donald Trump’s campaign focused on imposing enforcement mechanisms on those acting in violation of existing sanctions. The primary aim of the campaign is to drive Iran’s oil exports to zero.
The strain on Iran’s economy has been severe, fueling prolonged inflation and eroding the living standards of ordinary citizens. These pressures recently spilled into widespread unrest, with protests breaking out in cities across the country from December 28, 2025, and continuing to this day. The demonstrations have been met with a harsh response from authorities, with reports indicating that more than 2,000 people have been killed during the crackdown.
The Turn To Digital Currency
“During the recent mass protests, Iranians have significantly increased withdrawals of Bitcoin to personal wallets, possibly as a flight to safety amid currency collapse and political instability,” said Chainalysis.
It was not just Iran that turned to digital assets. The IRGC also significantly contributed to on-chain activity during Q4, 2025.
“Notably, it is not just ordinary Iranians who have turned to crypto-the Islamic Revolutionary Guard Corps (IRGC) has extensively leveraged digital assets to finance its malign activities,” read the report.
In this way, the external and internal pressure of the country caused the country to turn to digital assets.
