Iran has officially launched a new Bitcoin-backed insurance service for vessels transiting the strategically critical Strait of Hormuz. Named Hormuz Safe, the platform primarily targets Iranian shipping companies and cargo owners. Authorities aim to generate $10 billion per year in revenue through this system.
Bitcoin-based coverage launched
The Hormuz Safe insurance takes effect during the transportation of goods and provides coverage once the cargo owner begins their journey. The transaction is certified by a signed receipt. While the official website of the platform is set to go live soon, Iranian media indicate that the service has already started operating on a limited scale at the border. Reports suggest that Hormuz Safe will eventually cover broader domains, including maritime insurance and encrypted ship control systems.
This initiative is expected to add a new financial instrument to the logistics sector, but it has sparked questions over whether passage of every commercial vessel through the strait could involve an additional mandatory fee. Currently, ships passing through the Strait of Hormuz can face charges as high as $2 million per transit.
New authority announced for the strait
The Iranian National Security Council has unveiled a new structure to oversee and manage the Strait of Hormuz more closely. According to reports, this new body—named the Persian Gulf Strait Authority—will be responsible for administering the Hormuz Safe insurance and disseminating real-time updates on regional operations.
Officials stated that the insurance service is initially available only to Iranian companies and cargo owners. Every cargo shipment is protected by an insurance certificate issued immediately after approval.
The Iranian government has indicated that revenue generated from the Strait of Hormuz transit system will be used to offset damages caused by ongoing US-Israeli airstrikes over the past six weeks.
Previously, ships transiting the strait were not charged any additional fees, but both the US and China have publicly opposed the new policy. The White House has noted that Chinese President Xi Jinping rejects both the militarization of the Strait and the imposition of transit fees. So far, China has not denied this stance.
UN Secretary-General António Guterres has also stressed that the strait should remain fully open and that ships should not be charged for passage.
Insurance costs and sanctions risks surge in shipping sector
Ever since military operations escalated in the region, insurance costs for ships bound for the Persian Gulf have soared. In just a few days, premiums for war risk coverage increased fivefold.
In March, some of the world’s largest insurance providers halted their services in response to this cost spike. Firms like Gard, Skuld, NorthStandard, and American Club withdrew from providing war risk policies in the Persian Gulf. Subsequently, a few state-supported insurers returned with limited offerings, and US-based Chubb Limited launched a $20 billion war risk insurance program.
Despite these developments, many shipping companies remain hesitant to transit the Strait of Hormuz due to the risk of new attacks, vessel seizures, and concerns over crew safety. According to reports from March, Iran began demanding transit fees in cryptocurrency from commercial vessels during the conflict, sometimes amounting to $2 million per trip.
The United Nations Convention on the Law of the Sea prohibits any passage fees on such international waterways. To date, no country or shipping company has publicly expressed official interest in Iran’s new Hormuz Safe insurance program.
