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(Bloomberg) — Iran has started a Bitcoin-backed insurance service for shipping companies that want to transit the Strait of Hormuz, the semi-official Fars news agency reported, citing documents obtained from Iran’s Ministry of Economy and Financial Affairs.
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Dubbed Hormuz Safe, the Iranian government says it could generate more than $10 billion in revenue for the Islamic Republic, Fars reported, without giving a time frame or a breakdown of how the service would work.
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Iran has effectively shut the Strait of Hormuz — a major conduit for global energy supplies and other goods — since the US and Israel began airstrikes against the country on Feb. 28. The government and the Islamic Revolutionary Guard Corps have since been looking to formalize control over the waterway, including imposing tolls and other fees. An insurance service could be another means to raise funds.
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According to a screen shot of the Hormuz Safe website, shared by Fars, the service will be for “Iranian shipping companies and cargo owners.” Iran is heavily sanctioned by the US and its use of cryptocurrencies like Bitcoin and Tether has ballooned since President Donald Trump started targeting its economy and energy exports during his first administration.
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“Cryptographically verifiable insurance policies will be provided for shipments passing through the Persian Gulf, the Strait of Hormuz, and the surrounding waterways, and payments will be settled in Bitcoin,” Fars reported, citing the website hormuzsafe.ir, which doesn’t appear to be accessible outside Iran. “The shipment will be covered from the moment of confirmation and signed receipt will be given to the owner.”
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The US and Iran have been observing an uneasy ceasefire since early April, and resolving the deadlock over the Strait of Hormuz is critical to any formal peace deal.
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Trump issued a fresh threat against Iran on Sunday, telling Tehran to “better get moving, FAST, or there won’t be anything left of them,” according to a post on Truth Social. The two sides have repeatedly rejected each other’s demands and can’t agree on how to restart peace talks.
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As their stalemate continues, more than 1,500 commercial vessels were trapped in the Persian Gulf as of early May, according to the US military. Oil producers in the region have been forced to severely reduce their output as they run out of space to store their crude.
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The Iranian government and the IRGC have allowed some vessels to make the journey via a designated route close to Iran’s coast, sometimes after requesting payments of as much as $2 million. In response, the US has blockaded Iranian ports.
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It’s unclear the extent to which the Hormuz Safe insurance service is tied directly to the IRGC or the government’s wider plans to consolidate an official toll system. Fars is closely affiliated with the Guards.
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It’s far from certain an insurance system for shipping based on Bitcoin would be feasible. Unlike so-called stablecoins that are pegged to a fiat currency like the dollar, Bitcoin is highly volatile — a feature that’s meant its adoption as as a means of payment has so far been limited. Foreign ship owners may also be hesitant to use such a mechanism for fear of breaching US sanctions on Iran.
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