Iran will reportedly charge oil tankers fees in bitcoin for passing through the Strait of Hormuz during a two-week ceasefire in the U.S.-Israel war, a move with potentially massive implications for sanctions enforcement and international trade.

Pay up: Hamid Hosseini, a spokesperson for the Iranian Oil, Gas and Petrochemical Products Exporters’ Union, told the Financial Times Wednesday that Tehran plans to require tankers seeking passage through the strait to submit cargo details to authorities by email and pay a fee of US$1 per barrel of oil in bitcoin during the two-week ceasefire, which U.S. President Donald Trump announced Tuesday evening. Hosseini did not respond to a request for comment. 

The price of bitcoin, which has plunged significantly from a high of about US$97,000 in January, was up about four percent late Wednesday afternoon to US$71,176. Earlier this month, Bloomberg reported that Iran was charging ships fees to pass through the strait payable in Chinese currency or stablecoins, crypto assets whose value is pegged to that of a central-bank-issued currency. White House press secretary Karoline Leavitt said Wednesday that the U.S. hadn’t “definitively accepted” that Iran should be allowed to charge tolls.

Legality in question: Iran’s decision to impose tolls—regardless of what currency they’re charged in—is a big deal. Under the United Nations Convention on the Law of the Sea, “all ships and aircraft enjoy the right of transit passage” through international straits. The Strait of Hormuz is crucial to global energy supply chains, with 20 million barrels of oil passing through it per day prior to the war.

Jason Chuah, a professor of maritime law at City St George’s, University of London, said in an email that charging the toll in bitcoin doesn’t change its legality. “If you’re charging ships simply to pass through an international strait, that’s still highly questionable under international law, whatever currency you use.” 

Risky business: Anti-money laundering consultant Denis Meunier warned in a text that paying such tolls would be “highly risky” for ship operators. He noted Iran has been blacklisted by the Financial Action Task Force, an international body that assesses countries’ effectiveness at tackling money laundering and terrorist financing. The U.S., Canada and other countries have also imposed economic sanctions against Iran, which ship operators risk violating by paying the tolls. Iran could use the toll proceeds to finance terrorism or fund its nuclear ambitions, Meunier said. Penalties for shipping companies found to have violated sanctions can be severe, sometimes reaching tens of millions of dollars. Matthew Burgoyne, chair of the digital assets and blockchain group at Osler, Hoskin & Harcourt, also said crypto platforms that process the toll payments “could be in big trouble” with regulators.

A familiar playbook: Iran has a well-documented history of using crypto assets to evade sanctions. Analysis by blockchain intelligence company TRM Labs shows bitcoin mining firms sell bitcoins they earn to the central bank, which then uses them to buy goods from other countries.

Crypto assets enable sanctions evasion by allowing fast, direct payments between parties, bypassing banks or card networks that might otherwise flag or reverse transactions. This feature, known as censorship resistance, constrains governments and law enforcement from controlling economic activity of all kinds. That includes uses widely considered bad for society (such as terrorist financing), as well as more sympathetic causes (such as people seeking a hedge against currency collapse under repressive regimes, including within Iran itself).

A double-edged sword: Burgoyne said the tolls don’t help bitcoin’s reputation as a tool for criminals and rogue states, and may trigger more regulatory scrutiny of crypto businesses. However, he said, the fact the digital asset is playing a role in such a high-profile event is a notable milestone. “It’s now entangled with geopolitics and global trade, which is what you’d expect with a mature monetary network,” he said. “It’s definitely a consequence of Bitcoin’s network effect.”