SS #68 - Iran Deploys $500M in Tether to Defy Sanctions and Prop Up Rial

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Good morning. Over in the Middle East, Iran remains cut off from the global banking system, leaving the country unable to settle international transfers via the SWIFT network. To navigate this, the Central Bank of Iran (CBI) has reportedly turned to digital assets, acquiring over $500M in USDT over the past year. The move appears to be a strategic attempt to bypass international sanctions and provide much-needed stability to a domestic economy under significant pressure.

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In Today's Edition:

• Headline: Iran Deploys $500M in Tether to Defy Sanctions and Prop Up Rial

• Quick Bites: Hong Kong to Issue First Batch of Stablecoin Licenses in Q1

• Yield of the Week: 12.96% APY on mStable

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HEADLINE

State of play: The Central Bank of Iran (CBI) reportedly acquired over $500M in USDT last year to bypass global sanctions and stabilize its crumbling domestic economy.

• The CBI used USDT to create a "shadow financial layer," allowing for international trade settlements outside the reach of the SWIFT system and U.S. regulations.

• Large volumes of the stablecoin were funneled into domestic exchanges like Nobitex to inject dollar liquidity and stem the rapid devaluation of the Iranian rial.

• Following a major security breach at Nobitex in mid-2025, the CBI shifted its tactics, utilizing cross-chain bridges and decentralized mixers to further obscure its financial trail.

What’s Next: Regulators will likely force Tether into more aggressive, automated wallet blacklisting, while Western authorities target decentralized bridges and "shadow" liquidity pools used for state-level evasion.

Why it Matters: Stablecoins are now active geopolitical tools. This usage validates USDT’s utility as a global reserve asset but invites "national security" level regulation that threatens the permissionless nature of crypto.

Our Take: This is a massive stress test for stablecoin neutrality. While it proves product-market fit, it accelerates the "regulatory squeeze". Expect a bifurcated market where "clean" compliant stablecoins are strictly separated from "shadow" offshore assets.

QUICK BITES

• Hong Kong to issue first batch of stablecoin licenses in Q1.

• Bank lobby targets stablecoin yield and open banking in policy push.

• Noble protocol will sunset Cosmos appchain and launch EVM-based Layer 1.

• Hashed unveils Layer 1 concept for upcoming South Korean stablecoin economy.

YIELD OF THE WEEK

mStable Pendled sUSDe: 12.96% APY

• mStable strategy secures a fixed return by holding Pendle Principal Tokens (PT) and automatically reinvests capital into new tokens upon expiry to keep the returns compounding.

• To boost potential earnings, the system uses Aave to lever the position up to 7.5x, with active monitoring to adjust exposure based on available market liquidity.

• Users incur a one-time entry fee of 0.2% and a 10% performance fee on profits earned, which covers the operational costs of managing the automated rollovers and leverage.

Mystic MEV Capital pUSD: 177.58% APY

• The vault is managed by MEV Capital, though a significant portion of the deposited capital is currently not yet deployed.

• There is a three-day lockup period for withdrawals and a 20% performance fee, which is already factored into the displayed APY.

• While the vault shows a baseline yield, it is not currently receiving additional PLUME rewards through Merkl.

Contango sUSDS/USDT on Morpho: up to 20.04% APY

• Contango provides a streamlined way to loop sUSDS/USDT on Morpho with up to 16.91x leverage and a liquidation point set at 96.5% LTV.

• The strategy currently has ~$730K in liquidity available for users to tap into.

• A service fee applies when executing these trades specifically through the Contango web interface.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.