How Iranians Are Moving Money Abroad to Dodge US Sanctions?

From currency dealers to crypto, Iranians are finding ways to circumvent sanctions, but each comes with its own problems.

Tehran, Iran – Decades of international sanctions have severely limited Iran's access to the global financial system, making it difficult for individuals and companies to make cross-border payments. Sanctions have only increased with the current war between America and Israel against Iran.

Many Iranians who cannot rely on conventional banking for international transactions have turned to alternative channels to pay for goods and services abroad.

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The end of the list While each solution channel offers a way to navigate some limitations, it has its own costs and risks that often fall far short of the security, reliability and efficiency of a functioning international banking system.

One alternative financial channel is to rely on networks of currency exchanges operating across borders, an informal system that matches people who need local currency in Iran with those who need foreign currency abroad. By balancing these conflicting needs, transactions can be settled without moving money directly between Iranian and foreign bank accounts.

Brokerage firms offer services comparable to those of foreign exchange traders. Typically, a customer through an intermediary in Iran, while the company or abroad, pays the intermediary in local currency, the partner arranges the payment in a convertible currency to the foreign supplier using funds held abroad.

Using foreign exchange brokers or brokerage firms can help bridge the gaps in access to international banks, but both often involve additional fees, exchange rate charges, delays, and added complexity.

Other Iranians do not deal with companies, but resort to private arrangements with individuals, including people they do not know personally, to transfer money across borders. When formal channels are not available, these deals may provide a practical solution, but they rely heavily on trust rather than enforceable guarantees.

Reza, an Iranian IT manager in Germany who did not want to give his full name, said: "This deal involves strangers who have to trust each other to make a deal without any proof or legal documents. "It relies entirely on trust, and either side can back out at any time and leave the other out of pocket."

The methods used – whether through companies or individuals – are informal and not the most secure. Ashkan Bahrami, an Iranian business expert, explained: "We have to use informal exchange systems and remittances for international trade, which carry risks such as loss of funds, fraud, and high transfer costs."

These networks are also vulnerable to geopolitical shocks. Some of their operations in the Persian Gulf countries have been disrupted by war, creating another layer of uncertainty for businesses and their dependents.

Another cryptocurrency offered by Stemsir enables users to transfer their wealth without relying on conventional banks. But even these digital assets have not provided a completely reliable escape route from sanctions. Earlier this year, the US Treasury Department's Office of Foreign Assets Control (OFAC) sanctioned several major Iranian cryptocurrency exchanges, including Nobitex, Wallex, Bitpin, and Ramzinex.

Alireza Yaqoubi, chairman of the board of the Iranian Fintech Association, warned that crypto transactions are traceable, "and very bad things can happen, such as sanctions imposed on several Iranian wallets, whether they belong to individuals, the central bank or other entities."

The possibility of sanctions, along with periodic internet disruptions, makes digital currency an uncertain option.

For businesses that import physical goods, the challenges go beyond payment. War-related disruptions and restrictions, particularly after the US naval blockade against Iran, have complicated shipping, lengthening delivery times and increasing uncertainty about when shipments will arrive.

Arghwan Ghazanfari, the CEO of Aron Trading Group, explained the dimensions of the disruption faced by importers in using the port of Shanghai, China, a major gateway for goods sent to Iran.

"Transit time used to be 26 days, but when this time has reached 102 or even 120 days, customers have to reconsider the import," Ghazanfari said. Unfortunately, the main problem now is that our supply routes are gradually cut off.

Even when Iranians find a way to pay abroad—and are willing to accept delays in receiving their goods—another problem remains: whether they can buy what they want.

The continuous decline in the value of the Iranian rial has severely reduced the purchasing power. The value of the Iranian currency against the US dollar has lost more than 10% in the last month, more than 55% in the last year, and almost 90% in the last five years.

And there is little certainty that the pressure will ease soon.

With the prospect of re-escalating conflicts over Iran and uncertainties clouding the country's economic outlook, the question for many Iranians is not how to transfer money across borders. How long they can last in an increasingly restrictive financial system and what it will cost them to do so.