Ayandeh Bank Collapse Sparks Iran Street Protests as Rial Hits 1.42 Million per Dollar

Iran’s banking crisis deepened this week as protests spread across major cities following the bankruptcy of Ayandeh Bank, one of the country’s largest private lenders, and a renewed collapse in the rial that pushed street exchange rates to historic lows.

Authorities moved Ayandeh Bank’s operations under Bank Melli, a state owned lender, after regulators said the private bank could no longer meet its obligations. Iranian media and international reporting have linked the failure to years of mismanagement, insider lending, and heavy exposure to real estate projects. Estimates circulating in foreign coverage say the bank served tens of millions of account holders, turning the collapse into a nationwide issue for households and businesses.

Officials sought to calm depositors by framing the move as a transfer rather than a liquidation. Still, videos shared online showed crowds gathering outside branches and commercial districts, as uncertainty spread over access to savings, payments, and salaries. The banking shock landed as Iran’s economy already faced high inflation, capital controls, and weak confidence in the financial system.

Currency slide fuels street protests

Pressure intensified after the Iranian rial slid to around 1.42 million per U.S. dollar on the open market, according to posts widely shared on X and video footage published by Sky News. The rate marked another milestone in a long decline that has eroded purchasing power and pushed up food and housing costs.

Human rights groups and regional outlets reported rallies by merchants and residents demanding relief from inflation and economic instability. Demonstrators chanted against what they described as chronic mismanagement, while shopkeepers warned that daily price swings made normal trade difficult. The protests echoed earlier unrest tied to fuel prices, wages, and currency volatility.

Commenting on the unrest, former U.S. secretary of state Mike Pompeo said Iran’s economy had been “ruined” by corruption and poor governance, arguing that public anger reflected long standing structural problems rather than a single shock.

Banking stress and broader financial strain

The turmoil in Iran comes as global banking risks remain in focus.

Within Iran, analysts point to the banking sector’s weak balance sheets and reliance on state support as a key vulnerability. Years of sanctions, limited foreign investment, and directed lending have left private banks exposed when asset values fall or deposits flee.

Economist and human rights advocate Alex Gladstein highlighted the scale of the rial’s collapse by contrasting today’s rate with the early 1980s, when the currency traded near 70 to the dollar. Meanwhile, Bitwise CEO Hunter Horsley framed the unrest as a reaction to prolonged economic mismanagement, saying the episode reflects a broader loss of trust in national monetary systems.

Iran’s currency and banking stress has also shaped the country’s uneven relationship with crypto. Iran legalized cryptocurrency mining in 2019 under licensing rules, while officials have repeatedly banned crypto use for domestic payments and imposed periodic restrictions, including temporary mining halts during power shortages. At the same time, multiple reports say Iran has used crypto for parts of its import settlement strategy since 2022, including frameworks that channel mined coins through state oversight to support trade under sanctions pressure.