Iran Introduces Virtual Asset Payments for Arms Sales

First Official Case of Virtual Asset Payments for Arms Exports
A Measure to Circumvent Economic Sanctions on Iran
Explains Sanctions Can Be Bypassed via Chatbot

The Iranian government is introducing a system that allows payments in virtual assets when exporting advanced weapon systems, as a countermeasure against U.S. economic sanctions. This is considered the first official case of a government adopting virtual asset payments for arms exports.

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According to the Financial Times (FT) on January 1 (local time), the Defense Export Center (Mindex), the agency under Iran’s Ministry of Defense responsible for defense exports, introduced a policy last year allowing payments for arms sales in various forms, including digital currencies, barter, and Iranian rial.

Mindex is a state-run agency responsible for Iran’s defense exports, with major clients in as many as 35 countries. The Mindex website features products such as the Emad ballistic missile, Shahed drones, Shahid Soleimani-class patrol vessels, and short-range air defense systems.

The site also lists a variety of weapons, including small arms, rockets, and anti-ship cruise missiles. Some of these weapons have reportedly been used by armed groups in the Middle East with Iranian support.

Analysts interpret Iran’s adoption of virtual asset payment methods for arms exports as a response to increased economic sanctions and pressure from the United States and other Western countries over its nuclear program. Due to the difficulty of concluding contracts under sanctions, Iran is utilizing alternative financial channels such as virtual assets.

Mindex is actively promoting arms exports by operating a chatbot on its website. In the Q&A section, the agency emphasizes that “there are no issues in fulfilling arms export contracts despite U.S. sanctions on Iran,” and that deliveries will be made “as quickly as possible,” highlighting its ability to circumvent sanctions.

Notably, Mindex specifies that contracts must include conditions related to “the use of weapons during conflicts with other countries,” but also states that “negotiations are possible between the contracting parties.” It even notes that payments can be made in the purchasing country, and that buyers may directly inspect the products in Iran with approval from security authorities.

FT concluded, after reviewing the website’s registration data and technical infrastructure, that it is operated by the Iranian government. The domestic cloud service hosting the site has been designated for sanctions by the U.S. Department of the Treasury. The U.S. believes the site is closely linked to Iranian intelligence agencies.

Meanwhile, according to the Stockholm International Peace Research Institute (SIPRI), Iran ranked 18th among the world’s major arms exporters in 2024. The Atlantic Council noted in its 2024 report that Iran could benefit from increased arms exports due to the Russia-Ukraine war.