Cryptocurrencies are a new arena of confrontation between America and Iran economy

In the midst of escalating tensions between the United States and Iran, cryptocurrencies are emerging as a new arena of confrontation that transcends traditional geography into an open digital space, where tools of financial pressure intersect with modern technologies, and redraw the features of the economic conflict between the two countries.

This shift reflects the transition of the battle from traditional banking channels to complex digital networks, in which cryptocurrencies are used as an alternative means of financing, at a time when Washington seeks to tighten its grip on money flows linked to Tehran, according to a report prepared by Zaher Ali.

In its latest steps, the US Treasury escalated its measures by announcing the freezing of about $344 million in crypto-assets linked to Iran as part of a broader campaign aimed at disrupting the use of these currencies as a parallel channel to the global financial system dominated by the dollar.

These measures rely on advanced technologies to track the movement of funds across block chains in an attempt to reduce Iran’s ability to use digital currencies outside the SWIFT system, which constitutes one of the most important tools of Western financial influence in managing the global monetary system.

However, experts believe that this escalation may not achieve a quick impact, as Iran has long experience in circumventing sanctions, benefiting from alternative financial networks and relationships with external partners, especially in China, in addition to using cryptocurrencies in transactions that do not pass through traditional channels.

Parallel networks

Estimates reveal the expansion of these activities, with reference to financial links between trading platforms and digital wallets suspected of being linked to the Central Bank of Iran, at a time when Iran’s holdings of cryptocurrencies amounted to about $7.8 billion over the past year, according to Chainalysis data.

In this context, the role of the Revolutionary Guard is highlighted, which is believed to be a major player in managing these networks, benefiting from the decline in the value of the Iranian riyal and high inflation rates, which enhances reliance on digital assets as a tool for hedging and financing economic activities.

Specialized reports, including estimates by Elliptec, indicate that the Central Bank of Iran possesses more than $500 million in Ether, which is used to support foreign trade and relieve pressure on the local currency, in a clear indication of the increasing integration of digital currencies into the structure of the Iranian economy.

As tensions escalated, behavioral indicators emerged within the market, as local platforms recorded a sharp increase in cryptocurrency withdrawals, an indication of individuals’ tendency to transfer their assets to external wallets or international platforms in anticipation of any sudden restrictions.

Within the framework of a policy of mutual pressure, Tehran is turning to unconventional options, including imposing fees on oil tankers in the Strait of Hormuz, with the possibility of allowing them to be paid in cryptocurrencies, in a move that may reshape the rules of global trade towards a “digital petrodollar” model.

Iran is not unique in this path, as countries such as Russia and North Korea resort to cryptocurrencies as tools to generate revenues or circumvent sanctions, using advanced technologies to hide financial flows, which establishes the features of a parallel digital economy that is difficult to subject to censorship.