How Iran Built a Parallel Crypto Economy

Fresh U.S. and Israeli strikes on Iran have renewed focus on a financial channel Tehran has developed alongside its restricted banking system: state-backed bitcoin mining and an expanding stablecoin network used to move value outside the U.S. dollar system.

Iran legalized crypto mining in 2019, allowing licensed operators to tap subsidized electricity in exchange for selling mined bitcoin to the central bank. In effect, the state converts cheap domestic energy into a digital asset that can be transferred across borders without routing through U.S.-controlled financial institutions.

Estimates in recent years have placed Iran’s share of global bitcoin mining power between 2% and 5%, though much…