Iranās Bitcoin mining isnāt just about making money-itās a survival tactic.
When the U.S. pulled out of the Iran nuclear deal in 2018, sanctions slammed shut nearly every door to global finance. Banks refused to process payments. Oil buyers vanished. Foreign currency dried up. Iranās economy shrank. But instead of surrendering, Iran turned to something no one expected: Bitcoin mining.
Today, Iran runs one of the largest Bitcoin mining operations in the world-accounting for 4.5% of all global mining power. Thatās not a coincidence. Itās policy. The government doesnāt just tolerate mining; it encourages it. Licenses were handed out to over 10,000 mining farms by 2022. Nine major cryptocurrency exchanges now operate legally inside the country. And by 2024, more than $4 billion in cryptocurrency had flowed out of Iran-up 70% from the year before.
How does mining help Iran bypass sanctions?
Sanctions block Iran from using SWIFT, from accessing U.S. dollars, and from trading oil through normal channels. But Bitcoin doesnāt care about borders or bank accounts. It runs on a global network that no single country can shut down.
Iran mines Bitcoin using its biggest advantage: cheap electricity. The country has massive natural gas reserves and power plants that run at near-zero cost for state-backed operations. Miners in Rafsanjan, Kerman, and other industrial zones get electricity so cheaply itās practically free-sometimes under $0.005 per kWh. Compare that to the U.S., where miners pay between $0.03 and $0.08 per kWh. That gap turns mining into a profit machine.
Once Bitcoin is mined, itās converted into other digital assets or sent to international exchanges. From there, itās traded for stablecoins like USDT or USDC, which can be used to buy everything from medicine to machinery. Iran doesnāt need a bank. It doesnāt need a middleman. It just needs an internet connection and a wallet.
The role of the IRGC and state-backed mining
This isnāt a grassroots movement. The Islamic Revolutionary Guard Corps (IRGC) controls the biggest mining operations. Facilities are built inside military bases, on land owned by powerful religious foundations like Astan Quds Razavi, and inside special economic zones with no oversight.
One 175-megawatt mining farm in Rafsanjan-a joint project between IRGC-linked companies and Chinese investors-is powered by natural gas and runs 24/7. These arenāt hobbyists with rigs in their garages. These are industrial-scale operations with dedicated power lines, armored server rooms, and political protection. They donāt pay electricity bills. They donāt answer to regulators. They answer to the Supreme Leader.
Since 2019, Iranās top leadership has openly endorsed Bitcoin mining as a way to replace lost dollar revenues. In 2020, the Central Bank of Iran began issuing licenses for crypto transactions. By 2021, Iran completed its first official import purchase using cryptocurrency: $10 million worth of medical supplies. That was a turning point. It proved the system worked.
How it compares to other sanctioned nations
Venezuela tried something similar with its Petro coin-but it was a state-controlled token with no real value. No one outside the country trusted it. North Korea hacked exchanges and stole crypto. Iran does something different: it legally mines Bitcoin, following the rules of the network while breaking the rules of the world.
Russia also ramped up mining after its 2022 sanctions, but itās still playing catch-up. Iran has had seven years to build infrastructure, train technicians, and embed crypto into its economy. Itās not just mining-itās building a parallel financial system.
Iranās strategy is also more integrated. Alongside crypto, it runs a ādark fleetā of over 320 tankers to smuggle oil. It uses shell companies in the UAE and Hong Kong to move money. It works with Russia on crypto-based trade deals. Itās not one tool-itās a whole ecosystem.
Who pays the price?
While the regime profits, ordinary Iranians suffer. The electricity used for mining is equivalent to burning 10 million barrels of oil per year-roughly 4% of Iranās total oil exports. Thatās power that could be heating homes, running hospitals, or powering factories.
Blackouts are common. In winter, cities go dark for hours. Families huddle under blankets while mining rigs in government-controlled facilities hum along, consuming power they donāt pay for. Iranian citizens report internet slowdowns because bandwidth is prioritized for mining farms. Small businesses struggle to stay online.
And the wealth? It doesnāt trickle down. It flows to the IRGC, to religious foundations, and to a handful of connected elites. The average Iranian canāt even open a crypto wallet without jumping through bureaucratic hoops. Meanwhile, the stateās mining operations are growing.
Why the world canāt stop it
Bitcoin is decentralized. No central server. No headquarters. No single point of failure. You canāt sanction a network. You canāt shut down a protocol. You can only try to block access to exchanges or freeze wallets-but miners keep moving.
Iran uses proxy services, mixing tools, and cross-chain swaps to hide where Bitcoin comes from. Transactions flow through TRON-based stablecoins, Chinese exchanges, and shell companies in free zones. Chainalysis and Elliptic can trace some of it-but not all. And even if they could, forcing exchanges to block Iranian IPs would mean breaking Bitcoinās core promise: open access for everyone.
Western financial institutions are caught in a bind. If they refuse to touch any Bitcoin that might have been mined in Iran, they risk excluding millions of users. If they donāt, they risk sanctions violations. Thatās why some banks just ignore it. Others hire blockchain analysts to scan every transaction. Neither solution is perfect.
The future of Iranās crypto strategy
Iran isnāt stopping. In 2025, new mining farms opened in Bushehr and Khuzestan, powered by surplus gas and solar. The government plans to increase mining capacity by 50% over the next two years. Itās building its own domestic exchanges to reduce reliance on foreign platforms like Binance.
Experts warn this could become a blueprint for other sanctioned nations-North Korea, Syria, even Russia. If one country can use crypto to survive sanctions, others will follow. The global financial system wasnāt built for this.
But thereās a catch: Bitcoin mining is energy-intensive. As the world moves toward renewables, Iranās advantage-cheap fossil fuels-could fade. If new mining hardware becomes more efficient, Iranās cost edge shrinks. And if international pressure forces more exchanges to block Iranian addresses, the flow of funds could slow.
Still, as long as sanctions stay in place, Iran will keep mining. Itās not a gamble. Itās a necessity. And right now, itās working.
What this means for the rest of the world
This isnāt just about Iran. Itās about what happens when a country refuses to play by the old rules. Bitcoin wasnāt designed to help rogue states. But it doesnāt care who uses it. It just runs.
Sanctions were meant to cripple economies. Instead, they pushed Iran to build something new-a decentralized, state-backed financial alternative thatās harder to control than any bank.
The lesson? Financial isolation doesnāt always work. Sometimes, it just forces innovation. And in the age of crypto, the weakest link isnāt the economy-itās the system trying to control it.
Matthew Kelly
this is wild. i live in canada and we complain about our hydro bills... these guys are mining btc with gas that costs less than a candy bar. š¤Æ