Since the start of the Middle East conflict, Iran has witnessed massive cryptocurrency flows.
Experts say they are being used to circumvent sanctions placed on Iran's Revolutionary Guards as well as a financial safe haven by civilians hit by soaring inflation.
AFP examines how exactly digital currencies are being used in the country.
- Millions of dollars -
In an unusually large movement, more than $10 million worth of cryptocurrencies left Iranian exchange platforms between February 28 -- the first day of Israeli-US airstrikes -- and March 2, according to data analytics firm Chainalysis.
By March 5, nearly one-third of these funds had been transferred to foreign exchanges.
While some of this exodus can be explained by citizens rushing to protect their savings, the sheer size of the sums involved suggests the involvement of "regime actors", Kaitlin Martin of Chainalysis told AFP.
Such action would likely occur out of fear of further sanctions or cyberattacks, according to experts.
In June 2025, at the height of the previous Israel-Iran conflict, leading cryptocurrency platform Nobitex had $90 million stolen by hackers linked to Israel, according to blockchain company TRM Labs.
- Iran implicated -
According to Chainalysis, several digital wallets used during this surge in cryptocurrency activity are directly linked to the Revolutionary Guards.
"Even during these internet outages some outflows are seen, suggesting that some have access to the exchange's cryptoasset holdings even when its website is inaccessible," noted cryptocurrency analysts Elliptic.
The state's grip is massive. Last year, wallets associated with the Guards were funded with more than $3 billion in cryptocurrencies, representing more than half of the country's cryptocurrency flows -- a share that continues to grow according to Chainalysis.
- 'Shadow banking' -
For Iran, largely cut off from the traditional financial system by international sanctions, cryptocurrencies are an alternative channel -- allowing the state to sell embargoed oil or to discreetly finance allied armed groups, such as the Houthis in Yemen according to US authorities.
The Financial Times earlier this year reported that Iran offered ballistic missiles, drones and other advanced weapons systems for sale using cryptocurrencies.
These digital assets contribute to a veritable "shadow banking", Craig Timm of the anti-money laundering organization ACAMS, told AFP.
Quicker to send and less expensive than a bank transfer, cryptocurrencies are difficult to trace owing also to loopholes in global regulations, he added.
- 'Lifeline' -
The Revolutionary Guards and Iranian central bank favor "stablecoins" -- digital currencies generally pegged to the dollar in a bid to avoid volatility.
But civilians are turning en masse to bitcoin, the world's leading cryptocurrency, which can be withdrawn from platforms and stored in personal wallets, beyond the authorities' reach.
Bitcoin currently trades for more than $68,000.
This strategy was already widely evident during brutally suppressed protests in Iran ahead of the war, according to Chainalysis.
In a country where inflation was already nearing 50 percent before the conflict started, cryptocurrencies are acting as a "lifeline" for the population in the face of the collapse of the national currency, said analyst Martin.
