Tehran, Iran – Decades of international sanctions have severely restricted Iran’s access to the global financial system, making cross-border payments difficult for individuals and businesses alike. The sanctions have only increased with the current US-Israeli war on Iran. Unable to rely on conventional banking for international transactions, many Iranians have turned to alternative channels to pay for goods and services abroad.
And while each workaround channel offers a way to navigate some of the restrictions, it comes with its own costs and risks, often falling short of the security, reliability and efficiency of a functioning international banking system. One alternative financial channel is relying on networks of currency exchangers that operate across borders, an informal system that matches those who need local currency in Iran with those who need foreign currency abroad. By balancing these opposing needs, transactions can be settled without money necessarily moving directly between Iranian and foreign bank accounts.
Intermediary firms offer services comparable to currency exchange traders. Typically, a customer pays the intermediary in local currency in Iran, while the firm or an overseas partner arranges payment to the foreign supplier in a convertible currency, using funds held abroad. Using currency traders or intermediary firms can help bridge gaps in international banking access, but both often involve additional fees, exchange-rate costs, delays and greater complexity.
Other Iranians don’t deal with companies, but resort to private arrangements with individuals, including people they do not know personally, to transfer money across borders. Those deals may offer a practical solution when formal channels are unavailable, but they rely heavily on trust rather than enforceable guarantees. These networks are also vulnerable to geopolitical shocks.
Some operating through Gulf countries have been disrupted by the war, adding another layer of uncertainty for businesses and individuals dependent on them. Cryptocurrency has offered another route, enabling users to transfer wealth without relying on conventional banks. But even these digital assets have not provided a fully reliable escape from sanctions.
Earlier this year, the US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned several major Iranian cryptocurrency exchanges, including Nobitex, Wallex, Bitpin and Ramzinex. Alireza Yaghoubi, chairman of Iran’s FinTech Association board, warned that crypto transactions are traceable, “and very bad things can happen, such as the sanctions imposed on multiple Iranian wallets, whether they belonged to individuals, the Central Bank, or other entities”. The possibility of sanctions, combined with periodic internet disruptions, makes cryptocurrency an uncertain option.
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