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>>Clarifying why Iran is employing Bitcoin to underwrite vessels during the Hormuz crisis

Clarifying why Iran is employing Bitcoin to underwrite vessels during the Hormuz crisis

crypthub

7 days ago

Bitcoin‑Backed Shipping Insurance

Iran has launched “Hormuz Safe,” a Bitcoin‑backed insurance service for vessels transiting the Strait of Hormuz, offering cryptographically verifiable policies and BTC payments. The Ministry of Economy forecasts up to $10 billion in revenue, though details remain vague. The concept was promoted by sanctioned businessman Babak Zanjani on social media.

War and Sanctions Context

A three‑month conflict has effectively closed the Strait, a route for about 20 % of global oil, pushing Brent above $100 and halting fertilizer, helium and petrochemical shipments. Both the United States and Iran block passage, leaving shipping firms in limbo and intensifying sanctions pressure. The closure underscores the strategic importance of the chokepoint.

Adoption and Risks

Crypto use in Iran has surged, with roughly 14 million users and Bitcoin accounting for about 2.2 % of GDP, providing a means to bypass banks and dollar‑based sanctions. However, Bitcoin’s price volatility and the near‑standstill traffic raise serious doubts about the scheme’s practicality. Engaging with the service could also expose insurers to US sanction violations.

Implications and Outlook

Few ships are available to insure, and potential legal risks may deter international participation, limiting the scheme’s success. Nonetheless, the initiative highlights how sanctioned states turn to digital assets for economic survival. It adds another layer of uncertainty to oil markets and the already volatile Hormuz choke‑point.