CoinW Research Institute

Recently, Iran has once again become the focus of attention. Against the backdrop of nationwide protests, the Iranian government implemented extensive internet and communication control measures on the evening of January 8. That night, Iran's external network connections significantly decreased within hours, with mobile data and fixed broadband services interrupted in most areas.

In this context, the demand for external communication methods and non-traditional financial tools has risen simultaneously. On one hand, satellite internet services represented by Musk's Starlink have been used in some areas to restore limited external connections; on the other hand, in the context of the local currency continuously weakening against international currencies, crypto assets represented by USDT have been used for everyday life and even military purposes.

At the same time, the escalating regional geopolitical tensions have further amplified Iran's currency pressures. The exchange rate of the US dollar against the Iranian rial has fallen to historic lows in the free market, deepening Iran's currency crisis. Below, CoinW Research Institute will analyze this event.

I. Starlink Game, the Suppressed Digital Window

Starlink Becomes a Fleeting Digital Window

In the initial hours after the nationwide shutdown on January 8, this lifeline was briefly activated. A small number of users who could still access the external network via Starlink became a link for information dissemination. The Iranian people rushed to upload on-site images and text records, leaking them through social media platforms like Telegram.

At this stage, the number of Starlink users reached hundreds of thousands and was highly dispersed. In the absence of conventional communication, Starlink became an important channel for sending out these messages. More voices called for Musk to increase support for Starlink in Iran. However, the constraints of reality were equally clear; without a sufficient number of ground terminals, all satellite coverage would be just a castle in the air.

Escalation of Electronic Warfare, GPS Interference and Encirclement

However, this faint digital beam soon encountered systematic suppression. The Iranian military quickly deployed military-grade electronic warfare equipment to implement high-intensity, large-scale interference with Starlink satellite signals, causing a dramatic decline in the connection stability of Starlink terminals.

Starlink's operational mechanism heavily relies on GPS signals for satellite positioning and time synchronization. The GPS interference methods originally used by Iran for anti-drone warfare were directly repurposed to suppress satellite internet. On the first day of the internet shutdown, the data packet loss rate of the Starlink network averaged 30%, with some areas even reaching as high as 80%, making it nearly unusable. Although this interference could not achieve absolute coverage nationwide, it was sufficient to silence Starlink on a large scale in Iran for the first time.

The Iranian authorities also simultaneously launched systematic legal and physical crackdowns. During the internet shutdown, security forces intensified their efforts to hunt down satellite terminals. Drones were used to patrol rooftops, specifically looking for Starlink's iconic dish antennas; targeted electronic jamming was implemented in neighborhoods suspected of having installed terminals, using high-intensity noise to cover specific frequency bands.

In this high-pressure environment, those still attempting to use Starlink had to adopt extreme evasion strategies. Some tried to hide their communication characteristics through multiple layers of VPNs, while others constantly moved their antenna positions, shortened their power-on times, or even only went online briefly at night.

The Iranian authorities are also preparing for long-term resistance, on one hand promoting a whitelist networking mechanism that only allows government-recognized institutions to restore limited access; on the other hand, accelerating the advancement of a "national intranet" system that permanently isolates the public from the global internet.

II. Cryptocurrency, a Safe Haven Under the Collapse of Local Currency

The internet blockade not only created an information vacuum but also quickly impacted Iran's already fragile financial system. Against the backdrop of intermittent bank service interruptions, restricted cash flow, and continuous depreciation of the rial, cryptocurrency has become a basic circulating currency, especially the stablecoin USDT.

Stablecoins represented by USDT have shown a clear duality within Iran's economic system. On one hand, USDT is used by residents as a hedge against inflation risks and to alleviate uncertainties brought about by the restricted financial system; on the other hand, stablecoins are also used for military funding flows, playing a role in evading sanctions in specific scenarios.

Civilian Level, Stablecoins as Safe-Haven Assets

From a civilian perspective, the rial's years of continuous depreciation have eroded residents' purchasing power. With limited channels for obtaining foreign exchange and the international clearing system being difficult to access, many citizens have gradually shifted their savings from the local currency to US dollar stablecoins. Among them, USDT issued on the Tron network is particularly common in Iran due to its low transaction fees, fast transfer speeds, and strong liquidity. USDT is widely used for anti-inflation savings, over-the-counter trading settlements, and even some daily payment scenarios.

During a phase of social instability and rising financial risks, this trend has further amplified. On the eve of the protests in December 2025, a large number of residents exchanged rials for USDT through OTC channels. The Iranian authorities began tightening regulatory policies, clearly stating that individuals could not hold stablecoins exceeding the equivalent of $10,000, with an annual purchase limit of no more than $5,000.

Military and Sanction Level, Stablecoins' Cross-Border Settlement Function

In addition to civilian scenarios, stablecoins have also been used for cross-border fund flows related to military and sanctioned entities in Iran. In 2025, Iranian defense-related export agencies publicly stated in external promotional materials that they supported the use of cryptocurrencies as a payment method, which included some military products and equipment exports.

According to data from TRM Labs, since 2023, the Islamic Revolutionary Guard Corps (IRGC) of Iran has utilized two UK-registered crypto trading platforms, Zedcex and Zedxion, to transfer approximately $1 billion in funds, most of which were primarily conducted using USDT on the Tron network. This reflects that, in a sanctions environment, stablecoins can also become an alternative settlement channel.

In Extreme Environments, Decentralized Technological Boundaries

The nationwide internet shutdown in Iran greatly compressed the immediate use of cryptocurrencies but also objectively promoted the exploration of the feasibility of cryptocurrencies under extreme conditions. The public began to try various coping strategies under extreme conditions. Some users with better technical conditions managed to maintain a tenuous link to the blockchain network relying on satellite links like Starlink, retaining limited crypto trading capabilities even with highly unstable communication.

At the same time, crypto assets, based on code consensus, demonstrated strong vitality when physical infrastructure was damaged. In contrast, traditional banking systems have an absolute dependence on physical infrastructure and administrative access. When the banking system is disrupted or shut down due to turmoil, individuals, even if they have network access, cannot utilize their funds stored in centralized institutions. However, the boundaries of crypto assets are infinitely broad; as long as there is an exit on the link, assets can cross borders and blockades to achieve value transfer. Crypto assets have also expanded the boundaries of financial services into a broader space.

III. Observations and Reflections on the Game of Digital Rights

From Territorial Sovereignty to Private Key Sovereignty

In the past, states primarily controlled the survival rights of their citizens through control of banks and fiat currencies. However, in the crises of Iran and Venezuela, it can be observed that geographical territories may lose absolute control over wealth. As long as the private key is in hand, an individual's wealth is no longer subject to the collapse of domestic banks or the depreciation of fiat currency. This awakening of private key sovereignty is also the core value that cryptocurrencies present in extremely turbulent regions.

Resilience and Stratification of Crypto Assets

Cryptocurrencies can help ordinary Iranian families preserve their savings amid inflation, while also allowing sanctioned entities to continue accessing resources through crypto networks. This dual attribute reflects the resilience of cryptocurrencies, especially fully decentralized cryptocurrencies represented by BTC, which reject any form of political filtering. They do not serve the powerful, nor do they solely belong to the weak; they are only loyal to algorithms. This cold neutrality is the fundamental reason they can gain global consensus in a turbulent world.

However, in the face of extreme political pressure and compliance scrutiny, different categories of crypto assets exhibit clear stratification. Centralized stablecoins represented by USDT, while possessing the functional advantage of value anchoring, have their underlying contracts embedded with centralized control mechanisms. This means that issuers can freeze assets at specific addresses on the smart contract level based on external legal directives or compliance pressures, which determines that USDT still struggles to escape the risk of external credit intervention.

In contrast, native crypto assets represented by BTC and ETH, which have no single controlling entity and possess high anti-censorship attributes, can achieve autonomous settlement without third-party permission. In the survival game where traditional banking systems fail and centralized protocols are restricted, these native assets, constrained only by algorithmic logic, may become the only reliable value anchor in extreme environments and the last credit card beyond technological boundaries.

At the same time, this demand for absolute anti-censorship has further spurred the industry's exploration of privacy coins. By obscuring transaction addresses and amounts, privacy coins attempt to layer information concealment attributes on top of algorithmic rigidity to cope with increasingly stringent on-chain tracking and sanctions, thereby constructing deeper technical defense barriers in extreme environments.

The Shift of Cryptocurrencies from Speculative Attributes to Survival Attributes

The cases of Iran and Venezuela also send a signal that, amid geopolitical conflicts, cryptocurrencies may become a lifeline for ordinary people. When fiat currencies lose credibility and the internet is cut off, the value of cryptocurrencies is no longer defined by their price increases but by their ability to "support individual survival." This shift from speculative attributes to survival attributes will prompt more economies on the edge of credit to fully embrace the crypto ecosystem at a fundamental level and view it as a digital refuge of modern civilization under extreme oppression.

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