The Role of Cryptocurrency Activities in Facilitating Iran’s Foreign Trade under International Financial Restrictions: Integrating Evidence from the ARDL Model and Expert Thematic Analysis

Abstract

The present study aimed to investigate the role of cryptocurrency activities in facilitating Iran’s foreign trade under international financial restrictions. The primary focus was on identifying the short- and long-run effects of cryptocurrency activity and explaining the mechanisms through which digital assets may reduce transaction costs, as well as the institutional constraints and risks associated with their use. The study employed a mixed-methods approach. In the quantitative phase, 131 monthly observations covering January 2015 to November 2025 were examined. Iran’s merchandise trade volume was calculated as the sum of FOB exports and CIF imports, cryptocurrency activity was measured using Bitcoin spot trading volume, and the oil price was obtained from the monthly average Brent crude oil price. Following the application of the augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests, an ARDL(1,1,1) model, the bounds test, and an error correction model were estimated. Heteroskedasticity and autocorrelation consistent (HAC) standard errors were employed to account for conditional heteroskedasticity. In the qualitative phase, data obtained from 18 semi-structured interviews with experts were analyzed using thematic analysis and integrated with the quantitative findings. The findings indicated that the bounds test confirmed the existence of a long-run relationship among the variables. Cryptocurrency activity had a positive and statistically significant short-run effect on foreign trade; specifically, a 1% increase in cryptocurrency activity was associated with a 0.039% increase in trade. However, the long-run cryptocurrency coefficient was positive but statistically insignificant. The full reimposition of sanctions reduced the level of monthly trade by approximately 23.3%, whereas the oil price had a positive and statistically significant long-run effect. The error correction coefficient indicated that 39.5% of disequilibrium was corrected each month. The thematic analysis also identified five themes: payment facilitation, dual macroeconomic consequences, retail investment behavior, institutional challenges, and policy lessons. Based on the findings, cryptocurrencies may serve as a complementary payment channel capable of reducing part of the friction in foreign trade in the short run; however, no evidence was obtained of a persistent long-run effect. Effective utilization of this potential requires risk-based regulation, infrastructure security, and a clear distinction between commercial payments and speculative activity.