Iran restricts stablecoin use as rial hits record low
Iran’s central bank has introduced sweeping restrictions on the use of stablecoins, limiting annual purchases to $5,000 and overall holdings to $10,000 per individual.
The policy, announced on September 27 by the High Council of the Central Bank, comes as the Iranian rial hit a record low of 1,136,500 against the U.S. dollar, ahead of the expected reimposition of United Nations sanctions.
According to council secretary Asgar Abolhasani, the rules apply to all users and traders operating on licensed digital platforms and must be implemented within a one-month transition period. Existing holders of stablecoins will also be required to comply. Violations could trigger penalties for those exceeding the legal thresholds.
Stablecoins play a vital role amid inflation and sanctions
Stablecoins—primarily Tether (USDT)—have become indispensable for Iranians coping with chronic currency devaluation and soaring inflation. For ordinary citizens, they serve as a safe haven to preserve savings, while businesses use them as a lifeline to conduct cross-border transactions despite financial isolation. This role has grown more pronounced during periods of geopolitical tension, including recent flare-ups involving Israel and the United States.
Local exchanges have reported spikes in trading volumes and capital outflows coinciding with such events, underscoring the reliance on dollar-pegged assets as a hedge. By imposing caps, the government risks disrupting the financial strategies of thousands of small traders who depend on crypto markets for income and stability.
Authorities aim to curb sanctions evasion and capital flight
The new restrictions also reflect concerns that stablecoins are being used to bypass sanctions. Reports suggest Iranian state actors have employed USDT to fund proxy groups, purchase sensitive goods, and facilitate imports—often moving billions through cost-efficient networks like Tron. The central bank’s move mirrors earlier attempts to curb demand for foreign currencies during economic downturns, when access to U.S. dollars and gold was restricted.
However, such efforts have historically proven ineffective, driving activity into underground markets. The rial’s steady decline over the past decade, fueled by sanctions, inflation, and governance challenges, highlights deepening distrust in state monetary policy. The latest caps signal mounting anxiety over capital flight and waning confidence in Iran’s financial system.
Recently we wrote that stablecoins have seen explosive demand over the past quarter, recording more than $46 billion in net inflows.
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