Russia and Iran use billions in stablecoins to circumvent international sanctions

Crypto is increasingly appearing in the world of geopolitics. For years, cynical rumors claimed that Bitcoin is primarily used by criminals to make anonymous payments. However, this is untrue, as the latest Chainalysis report shows a 694% increase in the amount of cryptocurrency being traded by sanctioned countries last year.

Russia and Iran in particular, are increasingly using crypto for international trade, ranging from laundering funds, payments for illegal oil trade, and even weapons purchases. However, all these payments are not made in Bitcoin, but primarily in stablecoins.

SWIFT

Stablecoins, usually linked to the US dollar, offer the stability needed to pay for oil shipments or military components without the SWIFT system (which is normally used for international financial transactions) interfering.

A few years ago, the amount of money that was being traded by Russia and Iran in stablecoins amounted to a few million dollars. By now, that amount has risen to billions per year and per country.

In February 2025, the Kremlin initially launched the A7A5 token, linked to its own ruble, which generated approximately $93 billion in trading volume. Tehran, however, has not lagged behind and has recently even started selling weapons that friendly countries can pay for in stablecoins.

Organizations with ties to Iran, from Hezbollah to the Houthis, are also using cryptocurrencies on an unprecedented scale. Although illicit transactions account for less than 1% of total cryptocurrency trading volume, the increasing use of stablecoins by sanctioned states is raising growing questions about the effectiveness of traditional economic sanctions. Cryptocurrencies are thus at the centre of a new form of economic warfare.