How Stablecoins Help Sanctioned States Bypass Restrictions

Since three specific countries were mentioned at the outset, it is worth examining how each of them uses stablecoins to mitigate sanctions pressure.

At the time of writing, Iran ranks second among countries facing the highest number of sanctions. Its authorities have had more time than most to search for ways to circumvent restrictions.

The first wave of sanctions followed the Islamic Revolution of 1979−1981. Later, Iran’s support for armed groups and the development of its nuclear program pushed the country to the top of the sanctions rankings. In 2022, however, Russia overtook Iran, a point discussed later in this article.

Iranian authorities began viewing cryptocurrency as a sanctions-avoidance tool in 2018. Initially, the focus was on issuing a national digital currency. That same year, reports surfaced indicating that local regulators had started using cryptocurrency to bypass restrictions.

In 2019, Iran introduced PayMon, a gold-backed token. One of the project’s stated goals was to counter sanctions. However, PayMon failed to gain meaningful adoption.

By 2020, media reports suggested that Iran had shifted toward publicly available cryptocurrencies to cope with sanctions pressure. Two years later, authorities legalized mining and began using domestically mined assets for settlements.

Over time, dollar-pegged stablecoins became the primary focus. By 2026, the volume of transactions conducted by Iran’s central bank using these assets exceeded $ 500 million.

Inflows of the dollar stablecoin Tether (USDT) to wallets linked to Iran’s central bank. Source: Elliptic / The Guardian.
Even more notable figures have been reported:

Iranian authorities openly demonstrate their interest in digital alternatives to fiat, going so far as to offer business partners the option of purchasing weapons using cryptocurrency. The BitOk editorial team previously explained why this strategy is unlikely to succeed.

An additional detail is worth noting. According to media reports, Iran’s crypto ecosystem includes state-backed exchanges that assist authorities with asset conversion and settlements. These platforms have become a vulnerability for regulators, as opponents of the regime have targeted Iranian exchanges with hacks in an effort to disrupt established shadow payment channels.

Venezuela ranks fifth globally in terms of sanctions pressure. Like Iran, the country initially attempted to bypass restrictions through a national cryptocurrency, Petro, launched in 2018.

Petro was officially backed by Venezuela’s oil reserves. That same year, Reuters published an investigation showing that the project had failed. The oil fields allegedly backing Petro were never developed, and local residents, according to the investigation, had never encountered the national cryptocurrency in practice.

By 2019, media outlets began reporting that Venezuelan authorities had turned their attention to traditional cryptocurrencies, starting with bitcoin. The government began converting tax revenues into BTC.

By 2024, stablecoins were added to the list of tools used to navigate sanctions. Dollar-denominated tokens became the preferred option, as regulators viewed them as a solution to persistent foreign currency shortages.

A notable episode occurred when reports circulated online claiming that Venezuelan President Nicolás Maduro had been captured by U.S. forces. These reports were accompanied by viral claims about massive Bitcoin reserves allegedly under his control, estimated at around $60 billion. Blockchain tracking services, however, indicate holdings of approximately $21 million.

Bitcoin holdings of different countries. Source: bitcointreasuries.

It is important to note that cryptocurrency linked to sanctions evasion is often flagged. Recipients of such assets may later face account freezes or other restrictions. Asset compliance can be checked using the AML service BitOk.

Russian authorities had time to observe the mistakes made by other countries on the sanctions list, which Russia topped relatively recently in 2022. Some lessons were learned, although not all.

Development of a national digital currency in Russia began two years before the country led global sanctions rankings. After 2022, following approaches previously seen in Iran and Venezuela, lawmakers began considering the digital ruble as a potential tool for navigating international restrictions. However, the project’s implementation progressed slowly.

In 2023–2024, reports emerged that businesses linked to Russia were actively using cryptocurrency to bypass sanctions. At the same time, regulators worked on establishing a legal framework to enable the use of digital assets in international settlements.

According to media reports, domestically oriented crypto exchanges have also played a role in these efforts, reflecting an approach similar to Iran’s.

In 2025, attention shifted to the ruble-pegged stablecoin A7A5. It was launched on the Grinex exchange in Kyrgyzstan. Corporate records indicate that several companies associated with A7A5 are registered in Bishkek.

According to the Financial Times, approximately $9.3 billion in transactions passed through A7A5 during the first four months after its launch. By the end of July 2025, cumulative transfers exceeded $41.2 billion, with daily transaction volumes surpassing $1 billion.

Changes in the circulating supply of A7A5. Source: Elliptic.

Since its launch, total transaction volume processed through the ruble-backed stablecoin has reached approximately $93 billion, roughly equivalent to Lithuania’s GDP.

Each of the three countries attempted to address sanctions through a national digital currency. Tangible results were achieved only by Russia. Unlike its counterparts on the sanctions list, Russia operates through a project registered in a neighboring country, with only indirect indications of its connection to Russian regulators.

Iran and Venezuela appear to have settled on widely used dollar-pegged stablecoins.

Another common feature is the use of domestic crypto exchanges by two of the three countries, Russia and Iran. Venezuela, by contrast, focused on building its own cryptocurrency reserves.

Sanctions continue to push governments toward deeper involvement with cryptocurrency. Digital assets, originally created as an alternative to fiat for individuals seeking independence from central banks and regulators, have ultimately become a key instrument for governments attempting to navigate restrictions.

Media outlets regularly report on wallet freezes linked to sanctions-evasion attempts involving cryptocurrency. However, these measures remain insufficient to fully eliminate such activity.

In the realities of 2026, it is essential to verify the compliance history of digital assets to avoid dealing with flagged coins. Tools provided by BitOk can assist with this process.