Iran is collecting Bitcoin on the surface while threatening to cut off internet cables underwater, systematically "strangling" the dollar system

Original | Odaily Planet Daily (@OdailyChina)

Author | Golem (@web3_golem)

Last month, amid the US-Iran ceasefire, Iran announced it would levy transit fees on oil tankers passing through the Strait of Hormuz in the form of Bitcoin. After the news spread, it sparked discussions among crypto enthusiasts, who believed that Bitcoin had finally served as "electronic cash" in the most extreme geopolitical environment. Odaily analyzed at the time that this move by Iran was likely a geopolitical tactic, with Bitcoin acting as a smoke screen in this game, the core purpose being a public provocation against the US dollar system. (Related reading: Is Iran Just Bluffing About Paying Strait Transit Fees with Bitcoin?)

But looking at it a month later, Iran has thrown out a genuine "financial bombshell." On May 18, Iran announced the launch of a state-backed digital maritime insurance platform, Hormuz Safe, which provides maritime insurance for ships passing through the Persian Gulf and the Strait of Hormuz, and settles payments in Bitcoin and other cryptocurrencies.

An official page for Hormuz Safe is circulating online. The image shows that Hormuz Safe's digital insurance services are aimed at Iranian shipping companies and cargo owners. Goods are insured from the date of shipping confirmation, and a signed receipt will be provided to the cargo owner.

Although the website is currently inaccessible (possibly due to node restrictions), the very plan to launch this platform proves that Iran's intention to collect Strait transit fees via Bitcoin is no longer just empty talk. Instead, they are already building a set of "quasi-financial infrastructure" to gradually turn it into a feasible and executable commercial reality.

Iran Aims to Reshape the Financial Order of the Strait of Hormuz

When Iran first announced to the world its intention to levy Strait transit fees in Bitcoin, my mind conjured up an extremely comical scene: countless oil tankers stuck in a "traffic jam" in the Strait of Hormuz, the bottleneck caused by an elderly captain at the front staring at his phone at a pending Bitcoin transaction yet to be picked up by a miner...

This crude, humorous imagination can amplify Bitcoin's characteristics and significance. But when considering the practicality of "paying Strait transit fees with Bitcoin," Iran wouldn't be foolish enough to collect them on the spot like highway tolls or parking garage fees. In fact, it doesn't even need to be paid directly under the name of "transit fees." Because modern international crude oil shipping fundamentally relies on insurance.

The Strait of Hormuz controls approximately 20% of the global oil supply. Every oil tanker navigating this narrow waterway between Iran and Oman must purchase maritime insurance. Without insurance, banks won't provide financing, and no shipowner or port would dare to sail or offer berthing.

Traditionally, for the past few decades, these insurances have been underwritten and settled by Western financial institutions. Lloyd's of London, European and American reinsurance companies, SWIFT, etc., have together built an interconnected international order for oil tanker insurance. Iran has been largely excluded from these institutions.

Now, Iran is preparing to breach this insurance system from the payment angle. Hormuz Safe, the digital maritime insurance platform backed by Iran's Ministry of Economic Affairs, intends to use Bitcoin and cryptocurrencies for direct policy settlement, bypassing the SWIFT network and any Western intermediaries.

This is a sanctions-evasion plan. The platform features blockchain-based instant settlement and digital signature receipts, creating a parallel insurance infrastructure that can operate without permission from any Western regulatory body. Simultaneously, it allows Iran to regain financial sovereignty, successfully circumventing the dollar-based financial system and avoiding pressure the US could exert through that system. The Iranian government believes that if this platform captures a significant share of the Persian Gulf shipping insurance market, it could generate over $10 billion in revenue.

This could even become the starting point for Iran's "de-dollarization," from restructuring the settlement system to the insurance system, ultimately shaking the entire financial order of the Persian Gulf region. However, rationally speaking, the resistance to achieving this is enormous.

Hormuz Safe attempts to use Bitcoin and blockchain technology to bypass the SWIFT network and Western intermediaries, reducing dependence on Western financial infrastructure. The ideal is good, but the reality may not gain acceptance. Because the global trade system is not just a technical system; it is a power system built on credit and force.

Therefore, bluntly speaking, without the nod of the United States, the insurance provided by Hormuz Safe might not be recognized by any institution or port. Even if a shipowner is willing to accept Hormuz Safe, once they leave the Persian Gulf and the Strait of Hormuz, most of the world's ports, banks, insurance companies, and exchanges still operate within the dollar system, making any insurance issued by Iran worthless. Moreover, following the US "code of conduct," if any shipowner, trading company, or port management authority dares to interact with Hormuz Safe, it could easily trigger secondary sanctions risks.

Therefore, the actual clientele for Hormuz Safe may be limited to ships already operating in the gray zone of US sanctions.

Iran is Financializing its Geopolitical Control

However, even though Iran is at a disadvantage in the international financial system, the reality is that it still holds geopolitical control. At least concerning the opening of the Strait of Hormuz, the United States can no longer decide unilaterally.

Regarding the current US-Iran situation, the Trump administration has consistently projected an optimistic and confident stance externally. On May 19, Trump canceled a planned strike against Iran, stating that negotiations had seen "some very positive progress." Iran, however, presents an unyielding face to the outside world. Iran's Supreme Leader's top military advisor, Rezaei, responded strongly to Trump's cancellation of the latest military strike, saying, "The iron fist formed by the powerful armed forces and the great Iranian nation will force them to retreat and surrender."

Furthermore, on May 19, Iran's Supreme Leader, Mojtaba Khamenei, reiterated on social media that if the "state of war" continues, they will consider opening new fronts in areas where the enemy is not proficient, emphasizing that "the enemy has minimal experience and is extremely vulnerable in these areas." The core of these new fronts Iran speaks of might lie in the continuous financialization of geopolitical control.

When the US-Iran standoff first formed, Iran used the threat of closing the Strait of Hormuz as a strategic bargaining chip, causing considerable disturbance in international financial markets and US politics. In reality, "closure" is the most primitive use of geopolitical control, as completely sealing the strait would also cost Iran dearly. The truly sophisticated approach is to directly convert this geographical advantage into sustainable financial gains and rules. The former destroys order, while the latter redefines it. The combination of geopolitical threats and economic threats intensifies the anxiety of the opposing side.

Iran is already doing this. Besides setting rules for oil tanker passage on the sea surface, Iran is also eyeing the undersea communication cables lying beneath.

In early May, Iranian military spokesman Ebrahim Zolfaghari stated on X platform that Iran "will charge fees for internet cables" (specific charging methods have not yet been disclosed). Lying beneath the Strait of Hormuz are submarine cables connecting Arabian countries with Europe and Asia, carrying massive amounts of internet and financial data traffic. This data impacts financial systems, AI, and people's daily work and lives, generating incalculable economic value.

Furthermore, Iran threatened that if companies using the submarine cables do not pay the license fee, it might implement an "internet blackout" strategy, specifically naming US tech giants like Google, Microsoft, Meta, and Amazon. Following this news, maritime intelligence and data provider Windward reported that Iran's statement has prompted ASN (Alcatel Submarine Networks), one of the world's largest submarine cable installers, to suspend all maintenance operations in the region.

From oil tanker insurance policies on the sea surface to fiber optic data beneath it, everything passing through the Strait of Hormuz is being redefined by Iran as a "chargeable asset." "If you don't pay, we'll cause trouble." At this moment, the physical vulnerabilities of capital and financial markets have become Iran's handiest weapons.

The surface of the Strait of Hormuz may seem calm, but Iran has already placed a knife at America's throat.