Iran Doubles Down on Bitcoin for Ships Passing Through the Straight of Hormuz
Iran launched a Bitcoin-backed insurance program called Hormuz Safe for ships passing through the Strait of Hormuz, aiming to generate over $10 billion annually while bypassing U.S. sanctions. Critics argue the scheme lacks credible reinsurance and may function as a disguised toll system, violating international maritime law.
Iran introduced a new insurance program called Hormuz Safe for vessels transiting the Strait of Hormuz, requiring premiums in Bitcoin or other cryptocurrencies. The initiative, backed by Iran’s Ministry of Economy and the Persian Gulf Strait Authority, covers risks like vessel inspections and detentions, with claims settled directly on the blockchain. Officials claim the program could generate over $10 billion in annual revenue, offering an alternative to traditional insurance amid sanctions and regional conflicts. The move follows Iran’s previous attempt to collect toll payments in Bitcoin, which faced backlash and U.S. sanctions, including the seizure of $344 million in USDT stablecoins linked to the Iranian regime. The shift to Bitcoin avoids counterparty risk, as seen in the USDT freeze, which previously supported the Iranian rial and international trade payments. Blockchain analytics firm Elliptic noted similar crypto use by Venezuela’s Maduro regime before asset freezes. Hormuz Safe operates through a platform issuing policies and liability certificates for cargo shipments in the Persian Gulf. Shippers pay premiums in cryptocurrency and receive encrypted receipts, with claims processed on-chain for transparency. However, critics argue the program may violate the UN Convention on the Law of the Sea, which prohibits unilateral transit fees. Shipping companies also question Iran’s ability to cover catastrophic losses, given sanctions restricting access to global financial markets. Abdul Khalique, head of Liverpool John Moores University Maritime Centre, warned that marine insurance requires substantial reserves and reinsurance, which Iran lacks due to sanctions. Rob Hamilton, CEO of bitcoin insurance firm AnchorWatch, noted Iran’s $7.8 billion in crypto activity in 2025 but questioned its ability to underwrite risks for high-value tankers, calling the scheme a ‘dressed-up ransom payment.’ Hamilton also highlighted the contradiction of Iran acting as both insurer and potential threat to shipping safety.
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