US and Iran Engage in Cryptocurrency Cat-and-Mouse Game

The use of cryptocurrency in Iran has become increasingly prevalent due to its ability to circumvent economic restrictions imposed by the US. The Iranian crypto ecosystem has grown rapidly, with a value of over $7.78 billion last year, according to Chainalysis.

However, this growth has set off a cat-and-mouse game between the US and Iran, with Washington trying to strangle Tehran's economic options. In April, Iranian authorities announced that they would ask oil ships passing through the Strait of Hormuz to pay a toll in cryptocurrency, which has already led to several payments being made.

The use of cryptocurrency in Iran is not limited to individuals; state-linked entities such as the IRGC have also taken advantage of it. According to Chainalysis, the IRGC accounted for around 50% of on-chain activity in the fourth quarter, reflecting its dominance in the country's economy.

But while cryptocurrency offers a way to evade sanctions, it also comes with risks. Cyberattacks and internet shutdowns have made it increasingly difficult for Iranians to trade in cryptocurrencies, and major exchanges have frozen Iranian accounts.