Iran is seeking to collect transit tolls from oil tankers passing through the Strait of Hormuz in cryptocurrency, a move that could deepen the role of digital assets in the country’s sanctions-hit economy, according to The Wall Street Journal. 

In a new report, the Journal said Tehran is charging tankers a tariff of $1 per barrel of oil for using the strategic waterway and wants those payments made in cryptocurrency so the funds cannot be easily traced or confiscated under sanctions. Hamid Hosseini, a spokesperson for Iran’s Oil, Gas and Petrochemical Products Exporters’ Union, told the newspaper that Tehran was pursuing the arrangement after the ceasefire. 

The demand has drawn renewed attention to Iran’s crypto economy, which reached about $7.8 billion last year, according to Chainalysis data. Analysts and researchers told the Journal that cryptocurrencies have become an increasingly important tool for Iran to conduct trade, obtain commodities and weapons, and build reserves outside the conventional financial system. 

“In any comprehensively sanctioned jurisdiction, crypto is useful,” Kaitlin Martin, senior intelligence analyst at Chainalysis, told the WSJ. “It’s very easy to settle cross-border trades and settlements. It’s fast. It’s relatively easy to come to obtain, given the vibrant crypto atmosphere in Iran.”

At the same time, digital currencies have also served as a hedge for ordinary Iranians coping with inflation and the collapse of the rial, the report said. 

Iran’s crypto activity is also increasingly dominated by the state, with the Islamic Revolutionary Guard Corps and its proxies accounting for more than half of the country’s activity, according to Chainalysis data cited in the report. The Central Bank of Iran has reportedly acquired at least $507 million of Tether in an apparent effort to support the domestic currency and facilitate international trade. 

How the tanker toll system would work in practice remains unclear, the Journal said. Crypto analysts told the newspaper that shipping firms could face operational difficulties acquiring, storing, and transferring large amounts of digital tokens on short notice, even under normal conditions. 

Read more at The Wall Street Journal