Years of international sanctions and a steep fall in the value of its currency have transformed Iran into a big player in the cryptocurrency market, the Wall Street Journal (WSJ) reported on Wednesday.

Chainalysis, a blockchain analytics firm, estimates Iran's cryptocurrency market was worth about $7.8 billion last year, or about 11.5 trillion won.

More than half of cryptocurrency activity in Iran is carried out by Iran's Islamic Revolutionary Guard Corps (IRGC) and related forces, according to Chainalysis' analysis.

The IRGC is known to use cryptocurrency as a means of payment to secure weapons and raw materials after international sanctions cut off access to the dollar-based financial network.

The IRGC is also known to be deeply involved in bitcoin mining.

Iran's central bank is also reported to have secured a large amount of tether, a dollar-pegged stablecoin, to defend the exchange rate and use it for trade settlements.

Iran is also pursuing a plan to charge a passage fee in cryptocurrency for oil tankers passing through the Strait of Hormuz as a way to evade international tracking.

Iran's plan to collect Strait of Hormuz passage fees in cryptocurrency has even moved the bitcoin market, the WSJ said.

After the United States mentioned a ceasefire deal conditional on reopening the Strait of Hormuz, bitcoin rose, including breaking above $72,000. One factor behind the gain was market expectations that shipping companies would move quickly to secure large amounts of bitcoin, it said.

Iran's use of cryptocurrency appears to be state-led, but ordinary citizens are also known to use cryptocurrency активно.

It said they prefer cryptocurrency as an alternative to protect assets amid high inflation and as a means of sending money abroad.

Some wealthy Iranians are also moving assets held at domestic cryptocurrency exchanges to private wallets or overseas exchanges.

That was because they were concerned about the possibility of emergency steps such as a government internet shutdown or the seizure of financial assets.

In fact, immediately after U.S. and Israeli attacks on Feb. 28, outflows from Iran's largest cryptocurrency exchange, Nobitex, are reported to have surged 700 percent within minutes.

Nobitex, a key channel through which Iranians exchange their local currency into tether and then convert it into other currencies abroad, has more than 11 million users.

The assessment is that the situation in which cryptocurrency has become a lifeline for the government and the public is similar to Venezuela.

Venezuela also saw broader use of cryptocurrency amid international sanctions and a collapse in its currency's value.

Caitlin Martin (케이틀린 마틴), a senior analyst at Chainalysis, said, "Cryptocurrency is very useful in sanctioned countries. Particularly in countries like Iran, where the crypto environment is in place, it can be acquired and used for payments quickly and easily."

[Yonhap News Agency]