Frank26: "DIGITAL CURRENCY IS SO HARD TO STEAL... ISN'T IT PARLIAMENT?", 3 MARCH

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Frank26:  "DIGITAL CURRENCY IS SO HARD TO STEAL... ISN'T IT PARLIAMENT?".....F26

The digital currency to be launched in Iraq.. between economic opportunities and potential risks

 2/26/2025  Baghdad

Today, Wednesday (February 26, 2025), the expert in international economic affairs, Nawar Al-Saadi, revealed the importance of the Central Bank of Iraq launching its own digital currency.

Al-Saadi told Baghdad Today, “From an economic standpoint, this step has great benefits, but at the same time it involves challenges and risks that must be dealt with carefully.”

He explained that “the importance of this step lies in several aspects, most notably that it provides a more efficient and transparent means of electronic payment, which reduces reliance on paper money and limits the informal economy,” adding: “It also contributes to enhancing financial inclusion by facilitating digital transactions, especially in a country like Iraq where a large percentage of the population is still outside the formal banking system.”

He added, "The central bank's digital currency could help reduce the costs of printing and managing paper currency, and improve control over cash flows, which would help combat corruption and money laundering."

“However, this step is not without risks, especially in light of the challenges facing the Iraqi financial system,” he added, indicating that “the most prominent concerns are the possibility of using digital currency in smuggling operations, especially if there are no strict mechanisms to monitor digital transactions. Iraq already suffers from challenges in controlling money transfers through informal channels, and any weakness in managing digital currency could lead to its exploitation by illegal networks.”

Al-Saadi also warned that “there are risks related to monetary stability, as the rapid transition to digital currency may lead to pressures on the traditional banking system, especially if banks are not technically and practically prepared for this change.” Moreover, any security or technical flaw in the digital infrastructure may make the financial system more vulnerable to cyber attacks or hacking.”

The international economic affairs expert pointed out that “in order to ensure the success of this step, it is necessary for the Central Bank to follow a well-thought-out policy to implement it gradually, with a clear legal framework to regulate the use of digital currency,” stressing “the need to strengthen the digital banking infrastructure and ensure the readiness of the financial system to accommodate this transformation without affecting economic stability.” If this policy is implemented with caution and transparency, the Central Bank’s digital currency can be an effective tool to strengthen the Iraqi economy and push it towards more modernity and financial openness.”

Earlier on Wednesday, the Central Bank Governor, Ali Al-Alaq, revealed the intention to create a digital banking currency to replace paper currencies.

Al-Alaq said, in a speech during the Ninth Finance and Banking Services Conference and Exhibition, which was followed by “Baghdad Today”, that “the financial and banking system will witness fundamental transformations, including the decline of paper currencies to be replaced by digital payments for central banks.”

He added that "the Central Bank is moving to create its own digital currency, to gradually replace the paper process as is happening in some central banks in the world," indicating that "we are seriously considering establishing a data center in Iraq, and the bank has begun to move on this issue as part of the digital transformation steps."  LINK