Inside Iran’s $507mln USDT bet to defend its collapsing currency

Iran’s crisis continues to demonstrate novel crypto use cases. The Central Bank of Iran (CBI) reportedly opted for USDT, Tether’s dollar-backed stablecoin, as a monetary tool to boost the value of its local currency, the Rial. 

In the latest research report by analytics firm Elliptic, the central bank bought $507 million USDT last year to bypass global sanctions and support the collapsing Rial. 

According to Elliptic, Iran bought the stablecoins via Emirati Dirhams (AED) and stored them on Nobitex, the country’s largest crypto exchange. 

Since the platform allowed users to save their USDT or exchange it for Rial, it also became a key tool to control foreign exchange markets. The report added, 

“The routing of funds to Nobitex indicates a strategy of injecting US dollar liquidity into the local market to prop up the Rial.”

In fact, the aggressive move was prompted by Rial’s 50% devaluation.  

“The CBI’s accumulation of USDT began in earnest during a period of extreme economic volatility. The value of the rial had halved in just eight months, to a record low against the dollar (at that time).” 

Nobitex hack forces new strategy

According to the attached chart, the strengthening of the Rial against the USD between April and May 2025 suggested that the strategy worked. 

But the exchange was hacked in June 2025 by an Israel-linked group, claiming the Iranian government used it to bypass sanctions. Over $80 million was stolen, forcing the CBI and innocent Iranians who depended on it to change tactics. 

In fact, even Tether blacklisted some of the verified CBI’s wallets and froze $37 million USDT.

Iran’s response? The government opted for decentralized exchanges and swapped some of its USDT for other crypto assets to continue bypassing sanctions. 

Iranians turn to self-custody

However, using USDT to boost Rial appeared slightly undermined after the Nobitex hack. The local currency collapsed to zero against the USD in late December, triggering anti-government protests across Iran. 

Fearing another round of exchange hacks and the Rial’s collapse amid the protests, Iranians swapped funds to Bitcoin and moved it to personal wallets. 

For innocent Iranians, crypto became a refuge from the local economy collapse and ensuing chaos. Iran’s crypto volumes surged to over $7 billion during recent local protests and external pressure.

However, for the Iranian government, the experiment showed crypto could also be used not only to bypass sanctions but also to control foreign exchange markets.

But the government forgot that blockchains are transparent, and that stablecoins like USDT have a freezing feature, making them within sanctions’ reach. 

Final Thoughts 

• The Central Bank of Iran used over $500 million USDT to boost the local Rial currency via Nobitex exchange.
• But the Nobitex hack in mid-2025 and subsequent loss of over $80 million destroyed this strategy.