Iran's Central Bank buys $500 million worth of USDT: How cryptocurrencies are becoming a new tool to circumvent sanctions

The Central Bank of Iran has purchased over $500 million worth of dollar-pegged digital assets in the past year, primarily to address the rial crisis and US sanctions pressure. According to a report by blockchain analytics firm Elliptic, this purchase mainly occurred in April and May 2025, with funds flowing into domestic Iranian crypto exchanges where users can hold, trade USDT, or exchange for rials. This move reflects the severe financial difficulties Iran is facing and marks the expansion of stablecoin applications into macro-financial institutions at the national level.

Why is the Central Bank of Iran buying crypto assets?

Iran’s financial pressures are multifaceted. First, the country is excluded from the SWIFT system, unable to conduct transactions through traditional international payment networks. Second, its oil exports are heavily restricted, preventing export revenues from being repatriated, leading to a continuous decline in foreign exchange reserves. Against this backdrop, the Central Bank of Iran’s ability to defend the rial’s value and curb inflation is severely compromised.

How do stablecoins become “sanctions-resistant” tools?

According to Elliptic’s analysis, Iran’s central bank strategy is very clear: after purchasing USDT, they establish a “shadow financial layer” through domestic crypto exchanges. The characteristics of this layer include:

• Holding USD value without directly holding USD
• Not under direct US regulatory control
• Users can convert USDT to rials at any time, stabilizing the domestic currency
• Transactions occur entirely on crypto networks, bypassing traditional financial systems

The brilliance of this mechanism lies in its ability to evade US sanctions that freeze traditional finance, while using the price stability of stablecoins to combat domestic currency devaluation. USDT, ranked as the 3rd largest stablecoin by market cap, with a 24-hour trading volume exceeding $10.8 billion, provides sufficient liquidity to support such large-scale applications.

What larger trends does this reflect?

Iran’s central bank move is not an isolated event. According to Chainalysis, by 2025, Iran’s cryptocurrency ecosystem has grown to approximately $7.78 billion. This indicates that Iran is systematically building a financial system based on crypto assets.

From a macro perspective, this reflects several important phenomena:

Recognition of stablecoins by national-level institutions

Once considered “speculative tools,” stablecoins are now used by central banks to counter sanctions and financial crises. This marks the evolution of crypto assets from mere investment instruments to financial infrastructure.

Sanctions pressure driving crypto adoption

It is precisely due to limitations in traditional finance that Iran is motivated to adopt crypto assets on a large scale. Similar pressures may exist in other sanctioned or restricted countries and entities.

A new form of the US dollar

Holding USD value via USDT rather than USD itself changes the way US dollar dominance operates. The influence of the dollar is no longer entirely dependent on US authorities’ control but is also realized through crypto networks.

Market impact assessment

This $500 million purchase has limited impact on the USDT market. Compared to USDT’s market cap of $18.684 billion and daily trading volume of $10.894 billion, it does not constitute a significant shock. However, its signaling significance far exceeds the trading volume itself.

Once a national-level central bank recognizes the value of stablecoins, other countries and institutions facing similar difficulties may follow suit. This could promote broader adoption of stablecoins in international payments, reserves, and other fields.

Summary

Iran’s central bank purchasing $500 million in crypto assets is a key signal indicating that stablecoins are evolving from grassroots financial tools into national-level financial infrastructure. This not only reflects the pressure of US sanctions but also demonstrates the practical value of crypto assets in circumventing financial isolation.

On a deeper level, it challenges the monopoly of traditional financial systems over international payments. When central banks begin to use stablecoins to maintain financial operations, the status of crypto assets has quietly shifted from “risky assets” to “essential infrastructure.” Future focus will be on how many other countries adopt similar measures and whether this will drive a reconfiguration of the global financial landscape.