As Iran sinks deeper into a major political and social crisis, the promise of an uncensorable Bitcoin is brutally colliding with the reality on the ground. Internet blackouts orchestrated by the regime are paralyzing cryptocurrencies, leaving users helpless in the face of daily emergencies and calling into question Bitcoin’s effectiveness in conflict zones.
Bitcoin is useless in the face of repression by the mullahs’ regime in Iran
The situation in Iran has deteriorated significantly in recent weeks, marked by a violent response from the regime to the numerous protests that have swept through more than 100 cities. To stifle the protests, the authorities are resorting to a formidable weapon: cutting off the internet.
This digital “kill switch” strategy has direct consequences for the Bitcoin-based underground economy that was beginning to take root there, as well as for trading volume on exchange platforms.
Learn more about The Rise of Bitcoin in Iran: A Response to Inflation and Repression
Without internet access, the Bitcoin network remains technically functional thanks to the distribution of its nodes around the world, but its accessibility for end users becomes difficult, if not impossible.
As a result, holders of digital assets find themselves with wealth they cannot use or exchange for basic necessities, while the value of the rial, the local currency, has lost almost all of its value, dropping from 40,000 rials per dollar to 105 million in just two weeks.
Dollar exchange rate against the rial
An anonymous source on the ground, whose account reached us via access to the Starlink satellite network, describes this impasse:
“Right now, our biggest problem is that we can’t easily convert our Bitcoins into cash because the internet is down and the market lacks liquidity. But I’ll find a solution. Supermarkets are still open, although some aisles are empty and remain unsupplied. We’re having trouble finding products like cooking oil, for example.”
This inability to sell their BTC puts users in a vulnerable position, preventing them from meeting their immediate basic needs.
One might imagine a merchant accepting Bitcoin payments via personal access to Starlink, but beyond the limited accessibility of this solution, growing uncertainty now hangs over the sustainable return of the internet in Iran, discouraging its adoption.
Does the example of Iran definitively put an end to the Bitcoin narrative?
Recent events in Iran perfectly illustrate the current limitations of Bitcoin adoption as a shield against state coercion.
As long as the Internet remains centralized and thus controllable by governments, both freedom of expression and transactional freedom will remain conditional. And this does not apply solely to Bitcoin: the entire financial system is affected, including fiat currency payments via credit cards, as well as access to cash, since ATMs also depend on an internet connection.
However, while Bitcoin may temporarily fail in its role as a daily medium of exchange, it retains its fundamental property of resistance to seizure. Unlike bank accounts frozen by the regime, funds secured by private keys remain beyond the reach of the authorities.
For many, adopting Bitcoin remains the only tool to wrest monetary power from the hands of the state. It is insurance against the currency devaluation chosen by central banks and protection against targeted financial censorship.
Holding Bitcoin does not allow you to buy bread during a power or network outage, but it is above all a means of limiting a state’s power over monetary manipulation and the funding of freedom-destroying policies that justify an internet shutdown—a battle to be fought in advance, before censorship is in place.
