Iran's USDT trading route has bottlenecks in the United States

Core Points

Iranian companies are reported to be using cryptocurrencies for trade settlement. USDT is used to circumvent the banking system rather than directly expose itself to sanctions. It is estimated that undeclared overseas earnings have exceeded US$100 billion. The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) has frozen several Iranian crypto exchanges. However, counterparties remain the weak link in the payment chain.

According to a Financial Times investigation, the Central Bank of Iran has reportedly relaxed the enforcement of some foreign exchange regulations as war and sanctions restrict access to traditional payment channels. Some companies are using USDT and Bitcoin to settle foreign trade through domestic exchanges. There is currently no formal policy approving the use of cryptocurrencies in international trade, but the reported change shows that authorities are tolerant of cryptocurrency-based settlement methods given the difficulty for exporters to recover their profits and the urgent need for importers to find ways to pay overseas suppliers.

The pressure behind the US$100 billion estimate

The Iranian judiciary estimates that companies and individuals hold more than US$100 billion in undeclared earnings domestically and overseas. Strict revenue repatriation requires some exporters to return revenue through official channels, resulting in funds being stranded overseas, while importers face difficulties in obtaining foreign exchange.

This $100 billion estimate does not represent the total amount of cryptocurrency held by Iran, but rather describes a large income pool that is outside the reporting system. According to reports, USDT and Bitcoin provide a way to connect these funds to companies that need to finance imports.

How export payments can finance imports: Simplified transaction process

The following simplified process demonstrates how export earnings can be redirected to support importers and where authorities or service providers can intervene:

• Cross-border USDT settlement phase:
  • Exports: Iranian exporters receive revenue overseas. A buyer, bank or payment intermediary may retain transaction records.
  • Conversion: Part of revenue is converted to USDT. Exchanges or brokers may collect identity and trading information.
  • Transfer: USDT reaches the importer or settlement intermediary. Its flow remains visible on the blockchain.
  • Suppliers: Overseas suppliers receive or convert payments. Exchanges, banks and other service providers may screen funds.

Although Iranian banks may be excluded from the cross-border link, exchanges, blockchain records and final conversions are still clearly visible.

USDT reduces currency risk but increases gatekeeper dependence

Because the USDT is designed to track the U.S. dollar, exporters and suppliers can price invoices without accepting the short-term volatility of Bitcoin. USDT is widely traded on multiple exchanges and issued on multiple blockchain networks, making it easier to transfer and redeem than many other cryptocurrencies.

Bitcoin has no central issuer that can freeze the assets themselves, although escrow platforms can still restrict access to them. Its sensitivity to geopolitical events has become apparent in the market, such as when Bitcoin responds to rumors of a U.S. -Iran deal. This volatility makes Bitcoin less practical than the USDT for invoices that are expected to maintain predictable value between agreement conclusion and settlement.

USDT has different weaknesses. Tether introduced a policy in 2023 to freeze wallets associated with individuals and entities on the OFAC sanctions list and continues to cooperate with law enforcement. In April 2026, the company said it helped freeze more than $344 million in USDT at two addresses. Therefore, Tether can freeze USDTs located in recognized addresses.

U.S. law enforcement targets new portal

The same intermediaries that make cryptocurrencies useful in trade have become targets of U.S. law enforcement. On June 2, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) designated four Iranian digital asset exchanges, Nobitex, Wallex, Bitpin and Ramzinex, accusing them of supporting Iran's financial sector or facilitating sanctioned activities.

Commercial activities reported by the Financial Times should not be regarded as evidence that every Iranian crypto payment involves sanctioned parties or prohibited trade. Legal status depends on the business, goods, jurisdiction and payment services involved.

The Ministry of Finance said Nobitex handled more than half of Iran's digital asset inflows in 2025. The department also said its broader enforcement actions resulted in the freezing of nearly $500 million in regime-related cryptocurrencies.

The Treasury Department described the funds as "frozen," meaning their flow was blocked. This is different from "confiscated" assets that have been transferred to government control. Unrelated U.S. cases show what can happen once authorities gain control. In July, government-linked wallets transferred approximately $297 million in confiscated Bitcoin and Ethereum to Coinbase Prime. The assets have nothing to do with Iran, but their movement demonstrates how confiscated cryptocurrencies can be merged with government custodians during legal proceedings or disposal decisions.

For transactions related to Iran, enforcement may begin before assets are confiscated. Even if individual exchanges are not separately listed on the OFAC sanctions list, OFAC treats Iran's digital asset exchanges as blockaded financial institutions. When property involving these platforms enters American possession or control, it must be frozen.

Risks are not limited to U.S. companies. OFAC said non-U.S. institutions and other foreign parties could also face sanctions for major transactions involving designated Iranian exchanges.

Therefore, blockchain transmission may succeed, but commercial payments will still fail. Overseas suppliers may receive USDT but discover that exchanges will not redeem it, Tether has frozen wallets, or banks will not accept resulting funds. For relevant companies, the key issue is not only whether the tokens can be transferred, but whether the recipient can use them afterwards.

What signs are cryptotrade becoming a structural phenomenon

The first development to watch is whether the Central Bank of Iran will transform informal tolerance into written rules. An official framework could clarify which companies can use cryptocurrencies, how transactions should be reported, and whether digital assets can formally meet export earnings requirements.

Activity and enforcement data will provide further evidence:

• Stabiloin flows through Iranian exchanges: Continued growth suggests that use goes beyond occasional settlements.
• USDT premium in the Iranian market: Continued premiums indicate strong local demand for digital dollars.
• New OFAC exchange designation: Further action will show where U.S. authorities believe the greatest exposure lies.
• Tether freeze involving Iranian entities: This will measure the effectiveness of enforcement measures in reaching the token itself.
• Acceptance by overseas suppliers: Wider use will indicate whether a company can complete the entire transaction, rather than just transfer payments.

The more this trade relies on the USDT and identifiable exchanges, the faster payments can be settled, and the more effectively U.S. law enforcement can focus on a limited number of portals.

This document is for reference only and does not constitute legal or financial advice.