CoinW Research Institute
Iran has recently come into the spotlight again. Amid nationwide protests, the Iranian government implemented widespread internet and communications controls on the evening of January 8. Internet connectivity in Iran plummeted within hours that night, with mobile data and fixed broadband services disrupted in most areas.
Against this backdrop, the demand for external communication methods and non-traditional financial instruments has risen simultaneously. On the one hand, satellite internet services, represented by Musk's Starlink, have been used in some regions to restore limited external connections; on the other hand, with the continued weakening of local currencies against international currencies, crypto assets, represented by USDT, have been used in both daily life and even military applications.
Meanwhile, escalating regional geopolitical tensions have further amplified the pressure on Iran's currency. The US dollar to Iranian rial exchange rate has fallen to a historic low in the free market, deepening Iran's currency crisis. The following analysis from CoinW Research Institute will focus on this event.
I. Starlink Game Theory: The Suppressed Digital Window
Starlink becomes a fleeting digital window
In the initial hours after the nationwide blackout in Iran on January 8, this lifeline was briefly activated. A small number of users who could still access the internet via Starlink became the link for information to spread. Iranian citizens raced against time to upload images and text records from the scene, which were then disseminated through social media platforms such as Telegram.
During this phase, Starlink had hundreds of thousands of users, highly dispersed across various regions. With conventional communications completely paralyzed, Starlink became a crucial channel for transmitting these messages. Increasingly, there were calls for Musk to increase Starlink support for Iran. However, the practical constraints were equally clear: without a sufficient number of ground terminals, all satellite coverage would be nothing more than a pipe dream.
Electronic warfare escalation: GPS jamming and encirclement
However, this faint digital beam of light was quickly met with systematic suppression. The Iranian military swiftly deployed military-grade electronic warfare equipment to conduct high-intensity, wide-area interference with the Starlink satellite signal, causing the connection stability of Starlink terminals to plummet.
Starlink's operation relies heavily on GPS signals for satellite positioning and time synchronization. Iran's GPS jamming tactics, originally used for wartime anti-drone operations, were directly redirected to suppress the satellite internet. On the first day of the outage, Starlink's network experienced an average packet loss rate of 30%, reaching as high as 80% in some areas, rendering it virtually unusable. While this jamming could not achieve absolute nationwide coverage, it was enough to silence Starlink on a large scale in Iran for the first time.
Iranian authorities also launched a systematic crackdown, both legally and physically. During the internet shutdown, security forces intensified their search for satellite terminals. Drones were used to patrol rooftops, focusing on Starlink's signature disc-shaped antenna; targeted electronic shielding was implemented in areas suspected of having terminals installed, using high-intensity noise to cover specific frequency bands.
Under such high pressure, those who still tried to use Starlink had to resort to extreme avoidance strategies. Some tried to hide their communication signatures using multiple layers of VPNs, while others constantly moved antenna positions, shortened their power-on time, or even only went online briefly late at night.
Iranian authorities are also preparing for a protracted confrontation by implementing a whitelist-based internet access mechanism, allowing only government-designated institutions to resume limited access, and accelerating the development of a "national intranet" system to permanently isolate the public from the global internet.
II. Cryptocurrencies: A Safe Haven Amidst the Collapse of Local Currencies
Internet censorship not only created an information vacuum but also rapidly impacted Iran's already fragile financial system. Amid intermittent banking disruptions, restricted cash flow, and the continued depreciation of the rial, cryptocurrencies, especially the stablecoin USDT, became the primary circulating currency.
Stablecoins, represented by USDT , exhibit a clear duality within the Iranian economic system. On the one hand, USDT is used by residents as a safe haven to hedge against inflation and mitigate the uncertainty caused by restrictions on the financial system; on the other hand, stablecoins are also used for military financial flows, playing a role in circumventing sanctions in specific scenarios.
In the civilian sector, stablecoins serve as safe-haven assets.
From a civilian perspective, the rial's continuous depreciation over the years has eroded residents' purchasing power. With limited access to foreign exchange and difficulty reaching the international clearing system, many people are gradually shifting their savings from their local currency to US dollar stablecoins. Among these, USDT, issued on the Tron network, is particularly prevalent in Iran due to its low fees, fast transfer speeds, and high liquidity. USDT is widely used for inflation hedging, over-the-counter settlement, and even some everyday payment scenarios.
This trend was amplified during periods of social instability and rising financial risks. In the lead-up to the protests in December 2025, a large number of residents exchanged rials for USDT through OTC channels. Iranian authorities began tightening regulations, explicitly stipulating that individuals could not hold more than the equivalent of $10,000 in stablecoins, and that annual purchases could not exceed $5,000.
In terms of military applications and sanctions, the cross-border settlement function of stablecoins
Beyond civilian applications, stablecoins have also been used in Iran's cross-border capital flows for fund transfers related to military industry and sanctioned entities. In 2025, Iran's defense-related export agency publicly stated in its promotional materials that it supported the use of cryptocurrencies as a means of payment, which included the export of some military products and equipment.
According to data from TRM Labs, since 2023, the Iranian Islamic Revolutionary Guard Corps (IRGC) has transferred approximately $1 billion using Zedcex and Zedxion, two UK-registered cryptocurrency exchanges. The majority of these transactions primarily used USDT on the Tron network. This demonstrates that stablecoins can serve as an alternative settlement channel even under sanctions.
The technological boundaries of decentralization in extreme environments
Iran's nationwide internet shutdown severely limited the immediate use of cryptocurrencies, but it also objectively spurred exploration of the feasibility of encryption under extreme conditions. The public began experimenting with various coping strategies for such extreme circumstances. Some users with better technical capabilities managed to maintain a connection to the blockchain network using satellite links like Starlink, preserving limited encrypted transaction capabilities despite highly unstable communication.
Meanwhile, the consensus mechanism of crypto assets, based on code, demonstrates remarkable resilience when physical infrastructure is compromised. In contrast, the traditional banking system is absolutely dependent on physical infrastructure and administrative access. When the banking system is disrupted or shut down due to instability, individuals with internet access cannot access their funds held in centralized institutions. Crypto assets, however, have virtually unlimited boundaries; as long as an exit point exists on the network, assets can transcend national borders and blockades to achieve value transfer. Crypto assets also expand the boundaries of financial services into a much broader space.
III. Observations and Reflections on Number-Weight Game Theory
From territorial sovereignty to private key sovereignty
In the past, states primarily controlled the right to survival of their citizens by controlling banks and fiat currency. However, the crises in Iran and Venezuela have revealed the potential loss of absolute control over wealth due to geographical boundaries. With private keys in hand, an individual's wealth is no longer subject to the collapse of domestic banks or the devaluation of fiat currency. This awakening of private key sovereignty is the core value that cryptocurrencies exhibit in extremely volatile environments.
The resilience and layering of crypto assets
Cryptocurrencies can both help ordinary Iranian families preserve their savings amidst inflation and allow sanctioned entities to continue accessing resources through encrypted networks. This dual nature also demonstrates the resilience of cryptocurrencies, especially fully decentralized cryptocurrencies like Bitcoin, which reject any form of political censorship. They serve neither the powerful nor solely the weak; they are loyal only to the algorithm. This cold neutrality is the fundamental reason why they have gained global consensus in a turbulent world.
However, different categories of crypto assets exhibit clear stratification when facing extreme political pressure and compliance reviews. While centralized stablecoins, represented by USDT, possess the advantage of value pegging, their underlying contracts contain centralized control mechanisms. This means that issuers can freeze assets at specific addresses at the smart contract level based on external legal directives or compliance pressure, making it difficult for USDT to escape the risk of external credit intervention.
In contrast, native crypto assets, represented by BTC and ETH, have no single controlling entity and possess high censorship resistance, enabling autonomous settlement without third-party permission. In a survival game where traditional banking systems fail and centralized protocols are limited, these native assets, constrained only by algorithmic logic, may become the only deterministic value anchor in extreme environments, and the last credit trump card beyond technological boundaries.
At the same time, this demand for absolute censorship resistance has further spurred the industry's exploration of privacy coins. By blocking transaction addresses and amounts, privacy coins attempt to add information concealment attributes to the rigidity of algorithms in order to cope with increasingly stringent on-chain tracking and sanctions, thereby building a deeper layer of technical defense barriers in extreme environments.
Cryptocurrencies are shifting from speculative to survival-oriented attributes.
The cases of Iran and Venezuela also send a signal that, in the context of geopolitical conflict, cryptocurrencies may become a safe haven for ordinary people. When fiat currencies lose credibility and the internet is cut off, the value of cryptocurrencies will no longer be defined by their price increases, but by their ability to "support individual survival." This shift from speculative to survival-oriented attributes will prompt more economies on the verge of collapse to fully embrace the crypto ecosystem at a fundamental level, viewing it as a digital refuge for modern civilization under extreme oppression.
