**Inside Iran's $507mln USDT Bet to Defend its Collapsing Currency**

The world of cryptocurrency has long been touted as a safe haven for those seeking to bypass traditional financial systems. For Iran, that promise has proven particularly alluring in recent times. As the country's currency, the Rial, continues to plummet, Tehran's authorities have turned to USDT - Tether's dollar-backed stablecoin - in an attempt to bolster its value.

**A $507mln Bet on USDT**

According to a recent report by analytics firm Elliptic, Iran's Central Bank (CBI) bought an astonishing $507 million worth of USDT last year. The purpose of this massive bet was twofold: to inject much-needed liquidity into the local market and to evade global sanctions that have crippled the Iranian economy.

**A Novel Use Case for Crypto**

The CBI opted for Nobitex, Iran's largest cryptocurrency exchange, to store its newly acquired USDT holdings. This platform allowed users to save their USDT or exchange it for Rial, effectively becoming a key tool in controlling foreign exchange markets. As Elliptic notes: "The routing of funds to Nobitex indicates a strategy of injecting US dollar liquidity into the local market to prop up the Rial."

**A High-Stakes Gamble**

This aggressive move was prompted by the Rial's drastic 50% devaluation, which had seen its value plummet against the US Dollar. However, as with all high-stakes gambles, there were risks involved. The CBI's decision to accumulate USDT was made during a period of extreme economic volatility - one that saw the Rial halve in value within just eight months.

**A Brief Success?**

The strategy seemed to bear fruit initially, with the strengthening of the Rial against the USD between April and May 2025. However, as with all good things, this success was short-lived. In June 2025, Nobitex was hacked by an Israel-linked group, who claimed that the Iranian government had been using it to bypass sanctions.

**The Aftermath**

Over $80 million was stolen in the hack, leaving the CBI and countless innocent Iranians reeling. To make matters worse, Tether itself blacklisted some of the verified CBI's wallets, freezing a staggering $37 million worth of USDT. Iran's response? The government opted for decentralized exchanges and swapped some of its USDT for other crypto assets - all in an effort to continue bypassing sanctions.

**A Crisis Unfolds**

However, using USDT to boost Rial had been slightly undermined by the Nobitex hack. As tensions continued to escalate, the local currency collapsed to zero against the USD in late December, sparking widespread anti-government protests across Iran.

**A Last-Ditch Effort?**

In a desperate bid to stem the losses, Iranians began swapping funds for Bitcoin and transferring them to personal wallets. The result was a surge in crypto volumes, with over $7 billion changing hands during recent local protests and external pressure.

**Lessons Learned**

For the Iranian government, this experiment has shown that cryptocurrency can indeed be used not only to bypass sanctions but also to control foreign exchange markets. However, they have since been reminded of the limitations of such methods - namely, the transparency of blockchains and the freezing feature of stablecoins like USDT.

**Conclusion**

Iran's crisis continues to demonstrate novel crypto use cases, with its government using USDT as a tool to defend against a collapsing currency. While this strategy may have had some initial success, it ultimately proved vulnerable to the risks inherent in cryptocurrency. As the world watches Iran navigate these uncharted waters, one thing is clear: the intersection of finance and technology will continue to evolve at breakneck speed - and those who fail to adapt risk being left behind.