Yemen’s Financial Shift: DeFi Adoption Jumps 63% Amid U.S. Sanctions on Houthi Banking Infrastructure

As U.S. sanctions continue to disrupt traditional banking systems in Houthi-controlled regions of Yemen, decentralized finance (DeFi) has emerged as a critical alternative. Recent data shows a 63% surge in DeFi utilization, highlighting a growing reliance on cryptocurrency solutions. This trend underscores the resilience of blockchain-based financial tools in geopolitically strained environments, where access to conventional banking is severely restricted. Yemeni users are increasingly turning to DeFi platforms to facilitate cross-border transactions, store value, and bypass sanctions-induced financial isolation. The rapid adoption reflects both the necessity of alternative financial systems and the broader global shift toward decentralized economic frameworks.

Yemen’s DeFi alternative

TRM Labs, a blockchain security firm, flagged over $900M flows from Houthi-linked wallet addresses to blacklisted users. Per the firm, this was a crypto trend consistent with other terrorist groups like Hamas and ISIS.

Amid the sanctions, the security firm added that Yemeni locals have been hit hard. The ongoing conflict has disrupted even financial services for diaspora remittances.

As a solution, Yemenis have opted for DeFi, which dominated with a 63% usage surge.  

TRM Labs stated,

“Website traffic suggests that among individuals in Yemen engaging with cryptocurrency services, DeFi platforms account for the majority of web traffic, constituting over 63% of observed activity.”

Source: TRM Labs

Per TRM Labs, crypto adoption will increase in Iraq and Yemen amid increased sanctions and restrictions in the traditional financial systems.

In fact, the firm said that Yemen could leverage Iran’s technical knowledge to circumvent such blockages via digital assets to fund its operations further.