A study by Adopt a Block explores the use of bitcoin (BTC) in Iran, a country under authoritarian rule and subject to international sanctions. High inflation, youth unemployment, and political repression are among the main drivers of the growing adoption of cryptocurrencies in the country. The Iranian rial has suffered a 95% devaluation in a decade, driving the population to seek financial alternatives.
Iranians prefer bitcoin and USDT for their daily transactions, as these two cryptocurrencies offer resistance to censorship and ways of circumventing financial sanctions. The study highlights the use of cryptocurrencies to preserve asset value in the face of rampant inflation and to bypass government censorship, making it easier to access international products and services.
Many Iranians are turning to BTC and USDT to protect their wealth from inflation. Despite the loss in value of the US dollar, bitcoin has proved to be the best performing asset of the decade, underlining its potential as a financial safe haven.
Using bitcoin and USDT allows Iranians to bypass government restrictions, offering valuable financial freedom in the face of censorship and international sanctions. These cryptocurrencies also offer them the opportunity to participate in the global economy despite the country's financial isolation.
Despite growing interest, the adoption of bitcoin in Iran faces obstacles such as power and internet cuts, distrust of digital money and a preference for riskier assets. Government regulation of cryptocurrencies and restrictions on internet access also present challenges for Iranian users.
According to a report by Iranian newspaper ArzDigital, 25% of Iranians owned cryptocurrencies in 2023, with a marked preference for bitcoin. Local exchange platforms play a crucial role, although high withdrawal fees and government restrictions on mining and cryptocurrency transactions pose challenges for users.
In Iran, Bitcoin is more than just an investment opportunity; it symbolises an escape from government restrictions. The growing interest in this cryptocurrency suggests a potential impact on the national economy, although obstacles such as its volatility and the need to train users in secure use persist. High transaction costs often push towards more centralised options, but alternative solutions are being developed to overcome these shortcomings. Iran's recent economic developments, notably its rapprochement with the BRICS and Russia, could reduce the impact of Western sanctions and improve the well-being of the population. In addition, the Bitcoin craze could stimulate an alternative economy, offering a degree of independence from international pressures.
