AJ
Iraq becomes the first Arab country to adopt digital currency as a replacement for cash. (CBDC)
In an attempt to modernize the financial system and improve transparency, the Central Bank of Iraq is getting ready to launch a digital currency. By using developments in financial technology, the project seeks to progressively replace physical currency.
The introduction of a central bank digital currency (CBDC) would represent a significant shift in Iraq's payment system, enhancing financial efficiency and supervision, according to Mazhar Muhammad Saleh, the prime minister's finance adviser.
Saleh claims that the shift to digital currency would prevent uncontrolled cash transactions, cut down on cash leakage, and lessen the cost of making and distributing paper money. By giving authorities the ability to trace financial flows, keep an eye on spending, and strengthen monitoring of capital transfers, the action is also anticipated to increase financial transparency. It will also assist control international transactions and bolster Iraq's anti-money laundering policies.
By giving underprivileged groups access to banking and promoting wider economic integration, the adoption of digital money is also seen as a step toward greater financial inclusion. To safeguard financial activities, Saleh underlined that the transition calls for a strong technology foundation, including safe internet networks and cutting-edge cybersecurity tools.
Additionally, he emphasized the need of public acceptability and urged government agencies to spearhead the adoption by incorporating digital payments into official transactions and tax collection.
The digital currency would enable online and mobile transactions while preserving conventional monetary functions like a unit of account, medium of exchange, and store of value, helping to create a more effective and stable financial system in Iraq.