Individuals and businesses move money abroad using informal exchangers and crypto

As international sanctions and a US naval blockade restrict Iran’s access to conventional banking, individuals and businesses are moving money abroad through informal currency exchangers, cross-border intermediary firms, peer-to-peer transfers, and digital assets.

Informal Exchange Networks Replace Conventional Banks

Decades of trade restrictions have intensified amid the ongoing US-Israeli war on Iran. Without access to traditional global financial infrastructure, transactions require alternative channels. Currency exchangers operate across borders to match individuals needing local currency inside Iran with those requiring foreign currency abroad. This informal balancing act settles cross-border payments without money directly moving between Iranian and foreign bank accounts.

Intermediary firms offer comparable services. Customers pay the firm in local currency inside Iran, while overseas partners disburse funds in a convertible currency to foreign suppliers using accounts held abroad. However, both currency traders and intermediaries introduce significant friction. Ashkan Bahrami, an Iranian trade expert, noted that these informal systems carry high transfer costs along with risks of fraud and lost funds. Geopolitical shocks—particularly military disruptions affecting Gulf countries—frequently threaten these remittance networks.

Trust-Based Private Deals and the Crypto Route

Many individuals bypass corporate intermediaries entirely, resorting to private arrangements with strangers. Reza, an Iranian IT manager in Germany, described the vulnerability of these transactions. Participants rely purely on trust without legal documentation, leaving either party able to back out and leave others out of pocket.

Cryptocurrency provides another mechanism for transferring wealth outside traditional banking, but digital assets remain exposed to regulatory enforcement. The US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned major Iranian cryptocurrency exchanges earlier this year, including Nobitex, Wallex, Bitpin, and Ramzinex. Alireza Yaghoubi, chairman of Iran’s FinTech Association board, warned that blockchain transactions are traceable, creating severe risks of wallet sanctions for individuals, the Central Bank, and other entities.