Hi Fintech Futurists —
This week we dig into the growing role of crypto as a neutral settlement layer for governments and everyday citizens amidst rising geopolitical tensions. The most recent example is Iran demanding crypto as toll fees for tankers crossing the Strait of Hormuz. We link this to the rise of the ruble-backed A7A5 stablecoin in Russia as well as the crypto-denominated aid donations raised by Ukraine and what this could mean for the global dollar system.
Today’s agenda below.
FINTECH: Why Iran demands crypto for ships crossing the Strait of Hormuz
ANALYSIS: Why Agentic Finance is not the Metaverse all over again (link here)
CURATED UPDATES: Paytech, Neobanks, Lending, Digital Investing
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Why Iran demands crypto for ships crossing the Strait of Hormuz
In 2025, 20 million barrels of oil passed through the Strait of Hormuz every day, representing about 20% of global petroleum consumption. Following US and Israeli attacks on Iran on February 28th, Iran’s Revolutionary Guard Corps shut the Strait to Western-allied shipping, causing traffic to collapse by over 90% within days.
The result is the current global oil crisis. Brent crude surged from $71 to above $112 per barrel in under a month, and around 175 million barrels of crude and refined products remain loaded on tankers stuck in the Gulf. The below diagram from the FT neatly shows the Strait’s strategic significance and the scale of the impact.
As part of last week’s fragile ceasefire agreement, Iran has agreed to let some westbound tankers through in return for a $1-per-barrel toll in bitcoin.
A lot of newsflow has centred around the toll itself, but this is not actually that novel.
Paying for passage dates back to the Ottoman levies on ships transiting the Dardanelles and Denmark’s “sound dues” on the Øresund, which ran from 1429 until the US pushed to abolish them in 1857. Today, the Suez and Panama canals continue to charge billions annually under agreed treaty regimes. But demanding crypto assets for transit is something entirely new.
The motivation lies in the infrastructure powering international trade.
Every year $150T (circa 40%) of global cross-border payments settle via SWIFT, the interbank payments network overseen by the G10 countries and the key plumbing that moves US dollar trade. Iran has already been disconnected from the network twice, first in 2012 and again after the US withdrew from the JCPOA in 2018. It is one of a handful of cases where US Treasury sanctions cover an entire country rather than specific entities. This means that Iran is, in effect, completely closed off to the dollar system.
Tehran has spent over a decade building financial workarounds to keep its economy afloat. These range from (1) shadow banks and front companies in the UAE and Hong Kong, to (2) hawala networks, and (3) an integration with Russia’s Mir payment system.
China has become the most significant of these channels, purchasing over 80% of Iran’s seaborne oil exports since the war began in February. These payments are reportedly settled in yuan via intermediaries and non-dollar banks with funds staying in controlled accounts. Settlements on China’s cross-border payments rails (CIPS) have grown sharply since March. But even these channels have limits. They often tie Iran to a single counterparty or keep funds locked in a bilateral loop.
Crypto offers an alternative and neutral settlement layer. Underlying blockchain rails can transfer value instantly around the world, without intermediaries, and with users preserving unique control over their assets. Its use in Iran has been growing.
According to Chainalysis, the total value of crypto received by Iranian-linked addresses reached $7.8B in 2025, with the IRGC accounting for roughly half of all activity by Q4.
Historically, the aggregate use of crypto in Iran has spiked in line with geopolitical conflicts.
The other half are everyday Iranian citizens who have fled to crypto to shelter from local currency fluctuations (the Rial is down 90% since 2018) and move value off local rails. This is important. We want to emphasise that the value of financial sovereignty here extends far beyond the evasion of sanctions. It offers capital preservation and control to everyday people on either side of a war.
The IRGC has historically used stablecoins like USDT for their oil sales, weapons procurement, and proxy financing because they preserve USD-denominated value and have deep liquidity. The reason for demanding bitcoin now is likely a response to issuers like Tether increasingly freezing wallets linked to sanctioned entities.
Side note: stablecoin issuers have a legal obligation to freeze OFAC sanctioned addresses, but have sometimes been slow. Just last week, Circle was accused of $420M+ in alleged compliance failures for the untimely freezing of addresses used for illicit funds.
A similar dynamic has played out in Russia following its invasion of Ukraine in 2022. Moscow’s banks were disconnected from SWIFT and major card networks like Visa and Mastercard suspended operations. Russian businesses needing to settle cross-border invoices and citizens looking to move value offshore turned to A7A5, a ruble-backed stablecoin.
A7A5 is issued via a Kyrgyz entity called Old Vector and primarily operates on Tron and Ethereum. The ruble reserves backing it sit in Promsvyazbank (PSB), a sanctioned Russian state-owned bank. The typical flow for users looks like this:
A Russian business converts local rubles into A7A5 tokens via Grinex, a Kyrgyz exchange.
They then swap those tokens for globally liquid crypto assets like USDT or BTC on a DEX like Uniswap.
The entity now has dollar-denominated liquidity without ever touching the dollar banking system directly.
The outstanding value of A7A5 sits at roughly $520M, making it the largest non-USD denominated stablecoin and a top-20 stablecoin overall. Last Summer, the stablecoin was used to transfer over $1B-equivalent in value a day.
The US recently tried to shut it down. Grinex was sanctioned in August 2025, but A7A5 administrators destroyed and reminted over 80% of circulating tokens to break the on-chain link to sanctioned wallets and resumed operations.
On the other side of the same conflict, Ukraine has become a top-10 country globally for crypto adoption. When the National Bank of Ukraine imposed strict capital controls to prevent capital flight after the invasion, citizens turned to digital assets to preserve savings and move value abroad.
The government also received over $80 million in crypto donations in the weeks following the invasion, fast-tracked digital asset legislation, and now holds an estimated $5.6 billion in bitcoin. This ranks it behind only the US, China, and the UK among sovereign holders. In the first 12 months of the war, pro-Ukrainian fundraising totalled over $212 million across government, blockchain projects, military charities, and humanitarian causes.
The common thread behind these three stories is a demonstrable demand for a neutral, global, instant settlement layer. The risk of weaponising the dollar system through SWIFT, capital controls on local currencies, or enforcing extra-territorial compliance is that it gives users of your product an incentive to find alternatives.
The dollar’s share of global foreign exchange reserves has declined from over 70% at the turn of the century to below 58% today, its lowest level in decades.
At the same time, the US has been at the forefront of stablecoin regulation with USD-pegged instruments making up 99.8% of the entire $320B asset class. This strategically significant as commerce in crypto assets to continues to grow. Advances in regulation, infrastructure, and new demand unlocked by AI agents all point to a shift towards borderless financial infrastructure.
All governments should be paying attention.
👑 Related Coverage 👑
Long Take: Why Agentic Finance is not the Metaverse all over again
We discuss the divergence between failed “build it and they will come” technology bets like Meta’s metaverse, with $83.6B in cumulative losses and only a few hundred thousand users, and the rapid rise of agentic finance, which builds on existing economic activity.
We show that unlike the metaverse, agentic systems are embedded into real workflows, with Ramp processing $10B+ in monthly spend and making 26MM autonomous decisions, and Stripe handling $1.9T in payments while enabling AI-native commerce.
We map the emerging full stack of agentic finance, from protocols (ACP, UCP, MPP) to identity (KYA, Visa TAP) and settlement layers like Tempo, highlighting coordinated industry adoption.
Curated Updates
Here are the rest of the updates hitting our radar.
Paytech
⭐ White House says stablecoin yield won’t hurt bank deposits - American Banker
Mastercard acquiring stablecoin startup BVNK for $1.8 billion - CNBC
Ramp’s New CLI Sparked a Wave of AI-Finance Speculation - Surf AI
Neobanks
Stablecoin Payments Firm KAST Raises $80 Million in Funding - Bloomberg
Revolut introduces AI assistant for money management - Finextra
Coinbase wins conditional approval for national trust bank charter - Finextra
Lending
Cash App launches ‘pay later’ feature for P2P transfers - Techcrunch
Revolut acquires full UK banking license after years-long wait - CNBC
Bolt lays off third of staff - Finextra
Digital Investing
Morgan Stanley launches Bitcoin ETF - Finextra
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This certainly makes the blockchain blockade more interesting.
Every day you just don’t know what comes next on the world stage.
Stay positive because we are all in it together 🌎