The ongoing turmoil in Iran and Venezuela has highlighted the complex role of stablecoins, particularly those backed by the US dollar, like Tether. These digital assets serve as a financial lifeline for citizens grappling with economic collapse while simultaneously being exploited by sanctioned entities to bypass restrictions. Amid widespread protests in Iran, triggered by severe economic distress and the devaluation of the rial, stablecoins have gained traction among the populace as a means to counteract inflation.
Recent reports indicate that the Iranian government has implemented internet restrictions, further complicating the situation. Despite challenges such as a major hack in 2025 affecting the nation's largest exchange and increased limitations on stablecoin holdings, the demand for Tether continues to grow. Citizens are now limited to a maximum of $10,000 in stablecoin holdings and can purchase up to $5,000 per transaction.
Moreover, allegations have surfaced regarding the misuse of stablecoins by the Islamic Revolutionary Guard Corps (IRGC). According to a report from TRM Labs, over $1 billion in stablecoins has been transferred through two UK-based companies, Zedcex and Zedxion, which are believed to operate collaboratively to facilitate financial operations for the IRGC, thereby contributing to a sanctions evasion network.