By Maryam Manzoori | 2025-02-03

Iran's Central Bank (ICB) has blocked payment gateways for cryptocurrency exchanges, eliminating a crucial financial lifeline for Iranians who had turned to Bitcoin and other digital currencies as the Iranian rial plunged to a record low.

The US dollar now surpasses 830,000 rials, IranWire reported January 22.

Under the new rules, even ICB-licensed exchanges are limited to one-way trading -- meaning Iranians can only convert existing cryptocurrency to rials, not purchase new digital assets to protect against inflation.

While the Islamic Revolutionary Guard Corps (IRGC)-linked Tasnim News Agency cited money laundering concerns and Tether market speculation as justification, experts challenge this narrative.

"As usual, the Islamic Republic acts with a ban, without providing justification, evidence and documentation," governance researcher Mohammad Mashinchian told Iran International TV.

"The main reason is that Iranian people are aware of the free fall of the rial's value and are looking for a place to save their hard-earned money."

Mashinchian noted that restrictions in traditional markets have pushed people toward cryptocurrency.

"Given the challenges and restrictions in the markets for buying dollars, pounds, and euros, and the tax and commission fees in Tehran's ambiguous gold and stock market, the only available and popular market for the youth is the crypto market," he said.

Regime tightens control

The Supreme Council of Cyberspace (SCC), established by Iranian leader Ali Khamenei, has moved to bring all cryptocurrency activities under state supervision.

In addition, authorities have moved to create a centralized cryptocurrency control system modeled after the national Shaparak banking network, Bitcoin news platform No Bullshit Bitcoin reported.

"Such schemes, rather than being aimed at developing and sustaining the market, seek to create new channels of theft and income for individuals and specific institutions affiliated with the government," Middle East analyst Alex Kennedy said on X.

Proxy funding flows freely

Even as ordinary Iranians lose access to cryptocurrency trading, the regime continues to fund its regional proxies through various channels.

Recent reports suggest that Iranian envoys have been flying from Tehran to Beirut international airport carrying suitcases filled with US dollars.

Airport security intercepted a suspected IRGC cash transfer to Hizbullah aboard a commercial flight on January 2, Lebanese Interior Minister Bassam Mawlawi said.

The IRGC operates networks moving billions of barrels of crude oil to China and other buyers.

These oil profits fund the regime's nuclear program, ballistic missile development and proxies including Hizbullah and the Houthis, according to multiple government and independent investigations.

"For Iranians enduring severe inflation, financial repression, and an isolated economy, Bitcoin represents one of the few remaining paths to financial freedom — a path the regime is now working to block," the Human Rights Foundation said January 11.