Iran on Monday unveiled its latest Bitcoin-fuelled plans to control the Strait of Hormuz as it resists global pressure to open the sea lane.
A new Strait Authority unveiled by Iran's top security chiefs says it will “manage passage” through the corridor, which typically handles a fifth of the world's oil supply.
The authority, which will broadcast to ships on a radio frequency, says sailing through Hormuz “is contingent upon full co-ordination” with Iran and that “passage without authorisation shall be deemed unlawful”.
Ships that do cross the strait may be charged for “insurance” in cryptocurrency under a new service called Hormuz Safe. Pro-regime media said on Monday the plan could generate more than $10 billion in revenue for Iran.
A prolonged blockade and levy would be likely to raise shipping costs even higher and worsen the economic impact of the war. Traffic has slowed to a near-standstill, with operators wary of making the crossing after 38 attacks on ships killed 11 people. Middle East countries have been forced to seek alternative routes to export oil.
The US and Gulf countries have strongly opposed any suggestion of Iran charging tolls on the strait. Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc, last month called for it to reopen with “no strings attached”.
Bitcoin system
Iran says it is in contact with Oman, on the opposite shore of the strait, about the new system.
The Hormuz Safe platform will offer “cryptographically verifiable insurance policies” for shipments passing through the Arabian Gulf, the Strait of Hormuz and nearby sea lanes, with payments settled in Bitcoin, Iran's Fars news agency reported.
Iran did not give a timetable or detailed financial breakdown for its insurance plans. Screenshots published by Fars suggest the service is intended for Iranian shipping companies and cargo owners. A website, hormuzsafe.ir, did not appear accessible outside Iran.
Cryptocurrency has become a major part of Iran's financial system as the country contends with sanctions and economic instability. The Islamic Revolutionary Guard Corps is believed to be a central player in a crypto market that handled an estimated $7.8 billion in activity last year.
Iranian state television said sailors would hear a message from the new authority over a radio frequency: “This is the [Arabian Gulf] Strait Authority. To pass through the Strait of Hormuz, ask for permission.”
It said the IRGC's naval forces were managing the strait.
Negotiation route
Iran has suggested it would be willing to reopen the strait as part of a wider peace deal. But the deadlock over Hormuz is regarded as one of the main obstacles in talks. The US military began a counter-blockade of Iranian ports last month on President Donald Trump's orders, further raising tension in the waters.
A new 14-point proposal submitted by Iran on Monday proposes the strait could be reopened in return for a permanent end to the war and the lifting of sanctions, an Iranian source told Reuters. The US has so far rejected Iran's demands, which are being conveyed via mediator Pakistan.
More than 1,500 commercial vessels were trapped in the Arabian Gulf in early May, the US military said. The Iranian government and the IRGC have allowed some ships, including Chinese vessels, to make the crossing via a designated route close to Iran’s coast.
European countries including Britain and France have said their militaries could help secure the Strait of Hormuz in future but only after the current conflict is resolved.
