Iran's digital economy has suffered losses of between IRR3 quadrillion and IRR7 quadrillion ($1.66bn to $3.88bn) over roughly 70 days of internet disruption, data from the Iran Blockchain Association on May 15 seen by IntelliNews indicated.

The disruption follows the recent 40-day conflict between Iran, Israel and the United States, during which Iranian authorities imposed sweeping restrictions on internet access, citing security concerns, effectively doing bigger damage to their own economy than the US or Israel could do.

Transaction volumes have fallen by 70% while corporate infrastructure costs have surged 120%, the association said in a study based on field data and interviews with senior business executives.

Daily losses from connectivity disruption have ranged between IRR30 trillion and IRR80 trillion ($16.6mn to $44.3mn) over the 60 to 70-day period covered by the analysis.

The estimates exclude what industry figures describe as the unquantifiable damage to user trust, brand reputation, deferred investment decisions and the migration of skilled technology workers abroad, effects expected to surface in economic data over a longer horizon.

Small and medium-sized enterprises have absorbed the heaviest blow, with limited working capital and a heavy reliance on online channels for sales and customer engagement. Falling user access to digital platforms, weaker social media engagement and disruption to digital marketing tools have driven sharp declines in revenue, with some firms forced to cut costs, lay off staff or shut down entirely.

Larger companies have not been spared, facing higher operating costs, lower team productivity, declines in service quality and erosion of user trust. Some have invested in alternative connectivity routes and additional technical infrastructure, deepening the cost base.

Freelancers, including software developers, designers, translators and content creators, have reported sharp income declines as access to work platforms and communication with foreign clients has deteriorated, alongside rising job insecurity and burnout.

The blockchain and cryptocurrency sector has been particularly exposed given its direct dependence on stable connectivity for identity verification, transactions, deposits, withdrawals and digital wallet management. Weaker international link quality has also pushed users towards informal access routes, raising exposure to phishing and other cyber threats.

Industry figures have pushed back against proposals for tiered or partitioned internet access as a substitute for stable, universal connectivity, arguing such arrangements would entrench inequality between businesses and undermine competition in the digital economy.

Iran's Vice President for Women and Family Affairs Zahra Behrouz-Azar criticised her own government's continued restrictions on international internet access, arguing that a digital economy cannot operate while access to the global web remains limited, Donya-e-Eqtesad reported on May 12.

"It is not possible to talk about a digital economy while access to the international internet is limited," Behrouz-Azar said at a ceremony marking National Home-Based Businesses Day, the 50th meeting of the National Headquarters for Organising and Supporting Home-Based Businesses and the launch of the "1,000 Squares, 1,000 Markets" plan and a new home-based businesses platform, the paper wrote. 

Iran’s digital economy suffered around $1bn in losses in April alone, the head of the blockchain commission at the country’s Computer Guild Organisation, Abbas Ashtiani, told state media IntelliNews previously reported, flagging daily damage of $30mn–$35mn as the Israeli–US war continues to disrupt connectivity.

Ashtiani said the damage spans direct losses, indirect costs and “lost profit”, warning that compensation would be “time-consuming” without a step-change in infrastructure investment. “Internet stability and speed are core infrastructure,” he said, framing connectivity as a lever for GDP expansion in emerging markets.

Iran's digital economy has emerged in recent years as one of the most productive segments of the national economy, supporting the livelihoods of several million workers across e-commerce, fintech, content production and freelance services.

Domestic platforms, including Rubika and Bale (similar to WhatsApp), remain active, but their ability to replace global services is uncertain, as many suspect the apps are monitored by the state.