Promoting the sale of defense equipment with cryptocurrencies — Iran officially introduces a new payment method

Iran under sanctions is making a significant shift in its defense export strategy. The state-owned National Defense Export Center (Mindex) recently announced that it is prepared to officially accept cryptocurrency payments for the export of defense systems such as ballistic missiles, drones, and warships. This was reported by the Financial Times in early January.

Could it serve as a new method to circumvent sanctions?

According to promotional materials released by Mindex, they are willing to negotiate defense contracts that accept payments not only in cryptocurrencies but also through barter and the Iranian Rial. Officially endorsing cryptocurrency payments for the export of strategically important military hardware at the national level is considered highly unusual.

Currently, Mindex claims to have commercial dealings with 35 countries and regions, offering a lineup that includes Emdad ballistic missiles, Shahid-type drones, Shahid Soleimani-class frigates, and short-range air defense systems. Some of these weapons are of the same models that Iran has reportedly deployed in combat, backed by non-state actors in the Middle East.

Countermeasures against Western sanctions

On the FAQ section of its official website, Mindex explicitly affirms that “even under economic sanctions imposed by the US and others, transactions can be carried out and products delivered.” The organization states, “As long as Iran follows its sanctions evasion strategies, there will be no obstacle to fulfilling contracts. We will also respond promptly to delivery deadlines for purchased products.”

In the past, US authorities have pointed out that Iran has been using cryptocurrencies to boost oil exports and move hundreds of millions of dollars outside the traditional financial system. In September last year, the US Treasury revealed the existence of a “shadow banking” network that mediates cryptocurrency payments on behalf of the Iranian government, involving individuals linked to the Islamic Revolutionary Guard Corps.

Position in global arms exports

According to analysis by the Stockholm International Peace Research Institute (SIPRI), Iran ranks 18th in the world for major arms exports in 2024. This places Iran behind Norway and Australia, highlighting its presence as a military exporter in the Middle East.

The introduction of cryptocurrency payments in the defense export market is being closely watched as a move to bypass the existing international financial system. How effective this initiative will be depends closely on the broader trends of strengthening international financial regulations.