The End of Dollar Dependence or the Beginning of Censorship? The National Payments Project Raises the Question of "Financial Sovereignty"
In a pivotal step toward internal monetary independence, the Central Bank of Iraq (CBI) issued an official circular to all banks and electronic payment service providers announcing the commencement of the implementation of the National Card Scheme project.
This is a local payment system managed through the national switchboard, completely separate from international platforms such as MasterCard and Visa. The decision comes at a particularly sensitive time, following the Popular Mobilization Forces (PMF) salary crisis and sanctions imposed on several banks, amid indications that Iraq is shifting to a relatively closed monetary environment in the face of external pressures.
A national system excludes international companies.
According to a circular obtained by Baghdad Today , the Central Bank has ordered the launch of a local system for settling bank card payments within Iraq, without going through any international entity. The circular clarified the need to adopt national codes such as (BIN) and (AID) to identify payment cards and link them to the national switchboard, which implicitly means eliminating any reliance on global payment networks such as Visa and MasterCard in local transactions. The circular emphasized that this project is "exclusively local" and that it will be completed by the end of this year, in preparation for its official adoption starting early next year.
Motives behind the decision: From sanctions to mobilization.
Banking expert and former Central Bank official Mahmoud Dagher told Baghdad Today that "the decision is partly linked to international sanctions and some pressure on Iraqi banks,
so an alternative internal system is being considered."
He added, "Iraq faces no legal or technical obstacles to establishing this type of system, and many countries have preceded us in this," but he explained that "local systems remain limited and cannot be used outside the country's borders."
It's worth noting that the decision came after the Popular Mobilization Forces' salaries were frozen at some banks linked to international payment systems, opening a new door for the Central Bank to restructure its payments infrastructure away from international political influence.
Monetary shift or financial isolation?
The new approach coincides with escalating tensions between Baghdad and Washington, and with the mounting pressure on major Iraqi banks accused of financing entities sanctioned by the US. In this context, the Central Bank appears to have decided to proceed with a project that protects the domestic market from any "potential political freeze." However, this option, despite its importance in terms of sovereignty, raises questions:
Is it possible to actually dispense with global payment systems?
Is Iraq structurally prepared to operate a closed system capable of meeting domestic demand?
Most importantly, does this project pave the way for a gradual financial decoupling from the dollar?
The National Card Scheme project is not merely a technical decision regarding banking infrastructure; it is a step with political, economic, and security dimensions. If completed by the end of the year as planned, Iraq will have taken its first steps toward "internal monetary independence." However, this remains conditional on the state's ability to ensure efficiency, prevent collapse, and build confidence in a system that has yet to be tested in a fragile economic reality. link
