By Michael Phillips | Republic Dispatch

Iran is entering what may be its most dangerous period of instability since the 1979 Islamic Revolution. What began in late December as a strike by merchants in Tehran’s historic bazaar has rapidly escalated into nationwide protests openly calling for the end of the Islamic Republic itself.

According to reporting by Deutsche Welle, the unrest reflects more than economic frustration—it signals a collapse in public confidence across social classes that once formed the backbone of the regime.

From Currency Crisis to Regime Crisis

The immediate trigger was the collapse of Iran’s currency. The rial plunged to roughly 1.45 million per U.S. dollar, nearly halving in value over the past year. Inflation now exceeds 42 percent, with food prices rising more than 70 percent year over year. For many Iranians, average monthly wages—equivalent to just over $100—no longer cover basic necessities.

But what makes these protests different is who joined first.

The shutdown of the Tehran Grand Bazaar was a shock to the system. For decades, bazaar merchants were a conservative pillar of the Islamic Republic and instrumental in the 1979 revolution itself. Their decision to strike marked a historic break with the ruling order.

Within days, protests spread to cities including Isfahan, Mashhad, Shiraz, Hamadan, and beyond. Universities erupted as students joined the demonstrations, while truck drivers and other workers declared solidarity strikes.

No More “Reform vs. Hardliner”

Unlike earlier protest waves that sought reform within the system, today’s demonstrators are rejecting the system outright. Chants of “Death to the dictator” target Supreme Leader Ali Khamenei, while echoes of “Woman, Life, Freedom” from the 2022 uprising have returned.

Equally striking are slogans rejecting Iran’s foreign entanglements: “Not Gaza, not Lebanon—my life for Iran.” Protesters are openly accusing the regime of diverting national wealth to fund militant proxies abroad while ordinary Iranians struggle to survive at home.

Analysts quoted by DW note that the distinction between “reformers” and “hardliners” has largely collapsed in the public mind. Even President Masoud Pezeshkian’s calls for dialogue and his replacement of the central bank governor have done little to stem the unrest.

Repression—And Concessions—Reveal Regime Anxiety

Security forces have responded with tear gas, rubber bullets, and arrests, with reports of live fire in several provincial cities. At the same time, authorities have ordered closures of universities and government offices across multiple provinces—officially citing energy conservation, but widely viewed as an attempt to disrupt protest coordination.

State media continues to blame “foreign interference,” pointing to the United States and Israel, a familiar narrative that appears increasingly disconnected from the economic realities facing Iranian families.

The Return of a Forbidden Name

One of the most underreported elements of the protests is the resurgence of pro-monarchy sentiment. Videos circulating online show crowds chanting “Long live the Shah” and invoking Reza Pahlavi, the exiled son of Iran’s last monarch.

From abroad, Pahlavi has called for nationwide strikes and urged security forces to side with the people. While he has emphasized that he seeks a democratic transition rather than a restored monarchy, the symbolism is powerful: protesters are openly rejecting the post-1979 order and looking backward for an alternative vision of Iranian identity.

Why This Matters Beyond Iran

From a center-right perspective, the protests underscore a long-standing argument: sustained economic pressure exposes the fundamental weaknesses of authoritarian regimes. Iran’s collapse has been accelerated by sanctions, war costs following the June 2025 Israel-Iran conflict, drought, and decades of corruption and mismanagement.

For the United States and its allies, a weakened Tehran could mean reduced support for groups like Hezbollah, Hamas, and the Houthis—though it also carries risks of escalation if the regime lashes out to reassert control. Energy markets, regional security, and nuclear tensions all hang in the balance.

A System Under Strain

As 2025 ends, Iran’s leadership faces a crisis it cannot easily contain. The alignment of bazaar merchants, students, workers, and middle-class families points to a legitimacy problem far deeper than currency fluctuations or budget missteps.

Whether these protests fade under repression or ignite a broader transformation remains uncertain. What is clear is that the Islamic Republic is confronting a level of unified public anger not seen in decades—and the old tools of denial and blame may no longer be enough to hold the system together.