Iran has introduced a new shipping insurance service called Hormuz Safe. The service uses Bitcoin instead of normal bank payments. It is meant for ships and cargo traveling through the Strait of Hormuz and the Persian Gulf.

The Strait of Hormuz is one of the world’s most important shipping routes. Around 20% of the world’s oil passes through it. Because of rising tensions involving Iran, the United States, and Israel, shipping in the area has become dangerous and heavily restricted.

Iranian officials believe the new insurance platform could earn the country more than $10 billion a year. The system is backed by Iran’s Ministry of Economy and Financial Affairs and was reported by Iranian news outlet, Wana News.

Hormuz Safe allows shipping companies to buy insurance using bitcoin instead of traditional banking systems like SWIFT. Iran hopes this will help it avoid U.S. sanctions that limit access to global financial networks.

The platform’s website says it offers “fast, verifiable digital insurance — paid via Bitcoin and settled at the speed of blockchain.” According to reports, insurance coverage begins as soon as a bitcoin payment is confirmed on the blockchain.

The insurance is designed to protect ships from problems such as inspections, detention, or confiscation. However, it is not yet known if damage caused directly by war or military attacks is included in the standard coverage or not.

Iran has already been charging ships transit fees for passing through the Strait of Hormuz. Some reports say vessels have paid as much as $2 million for permission to pass through the waterway during periods of high tension.

Iran’s interest in Bitcoin is closely connected to international sanctions. The country has faced years of restrictions targeting its banks, oil exports, and shipping industry. Bitcoin is harder for foreign governments to freeze or block, making it attractive to Iran.

Hamid Hosseini, spokesperson for Iran’s Oil, Gas and Petrochemical Products Exporters’ Union, previously told the Financial Times that shipping companies could pay Hormuz-related transit fees using Bitcoin or other non-dollar currencies, including the Chinese yuan.

Iran officially legalized industrial Bitcoin mining in 2019. Since then, the country has built a large digital asset industry. Some reports estimate that Iran once controlled more than 4% of global Bitcoin mining activity.

Iran’s choice of Bitcoin for this purpose comes as no surprise. The heavily sanctioned country has long sought ways to conduct international commercial transactions without risking its assets being frozen or confiscated.

Iran has experimented with stablecoins before, but those efforts were unsuccessful. In several cases, stablecoin issuers froze funds after suspecting that the assets were linked to Iran.

As a result, Iran has turned to a digital currency that cannot be frozen by a central authority and whose supply is inherently limited.

Digital assets use inside Iran has also grown quickly. According to CoinShares analyst Chris Bendiksen, “Around 14 million Iranians, roughly one in six, use Bitcoin”. He said digital asset transactions equal roughly 2.2% of Iran’s economy.

Still, many experts doubt that Hormuz Safe will succeed internationally. Analysts say shipping companies using the platform could face serious legal problems because of U.S. sanctions.