Resolution Criteria

A new regime is installed if the Islamic Republic of Iran is replaced by a different governmental system following the death of Supreme Leader Ali Khamenei in joint U.S. and Israeli air strikes on February 28, 2026. Resolution requires that a fundamentally different system of governance—not merely a succession within the Islamic Republic's existing institutional framework—takes power before April 1, 2026.

Currently, an Interim Leadership Council consisting of Alireza Arafi, Chief Justice Gholam-Hossein Mohseni-Eje'i, Speaker Mohammad Bagher Ghalibaf, and President Masoud Pezeshkian has assumed control pending election of a new Supreme Leader. The market resolves YES only if this council or its successor is replaced by a non-Islamic Republic government structure. Appointment of a new Supreme Leader within the existing constitutional framework resolves NO.

Background

Massive nationwide anti-government protests erupted in late December 2025, driven by economic crisis and the collapse of the rial, becoming the largest in scale since the 1979 revolution and spreading to over 100 cities. On February 28, 2026, Israel and the United States launched a coordinated joint attack on various sites in Iran. Khamenei's official residence was destroyed in a decapitation strike, killing Khamenei, several senior officials, and family members.

Military analysts warn that without "boots on the ground" or a fully armed organic uprising, the state's deep security apparatus can survive simply by maintaining cohesion, and that regime change cannot be facilitated through air strikes alone.

Considerations

There is no ready-made government-in-waiting, and while Reza Pahlavi has done serious work on transition planning, planning is not power, with no certainty about who governs Tehran if the clerical regime collapses. Operational authority over the security and military apparatus has become more concentrated within figures aligned with the Islamic Revolutionary Guard Corps, with real power remaining concentrated in established security and clerical networks despite formal constitutional transition mechanisms being in motion.