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Between supporters and opponents.. The Central Bank of Iraq prohibits the circulation of Bitcoin

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https://www.aljazeera.net/ebusiness/2021/10/11/بين-معارض-و-مؤيد-البنك-المركزي-العراقي

Between supporters and opponents.. The Central Bank of Iraq prohibits the circulation of Bitcoin

Many Iraqis invest in cryptocurrencies via global platforms (Getty Images)
10/11/2021


The digital bitcoin is shining and hovering near its highest levels since the beginning of last May, at about 55 thousand dollars, and it seems that the sharp rise wave has reached all alternative digital currencies now.

But the Central Bank of Iraq said - on its official website - that dealing with virtual digital currencies (Bitcoin) involves several risks, especially with regard to electronic piracy and fraud.

The Central Bank supports issuing a circular not to use it, and to subject its dealers to the provisions of the Money Laundering Law No. 39 of 2015 and the relevant laws in this regard.

Bitcoin - according to the Central Bank - is a virtual electronic currency that trades online only, without a physical presence, and is used for online purchases, supports payment using Bitcoin cards, or may be converted to traditional currencies in some cases.



The Central Bank of Iraq The Central Bank of Iraq supports the issuance of the circular not to use Bitcoin and to subject its dealers to the provisions of the Money Laundering Law (Al-Jazeera)

The foundation of the digital dinar

Cryptocurrency specialist Evan Doberdani opposes the Central Bank of Iraq's decision; Because he did not put an alternative to encrypted digital dealing, since many Iraqis invest and trade in encrypted digital currencies, with an estimated amount of millions of dollars through global platforms - according to him - which have crossed governments and borders as a result of modern technology and economic globalization.

Al-Doberdani added to Al-Jazeera Net that the countries with major economies such as the United States, China and the European Union began studying the issuance of their digital currencies soon by central banks.

For this, Al-Dobardani calls on the Central Bank of Iraq to plan to issue a digital currency called the “digital dinar” and not an encrypted digital currency, in order to get rid of the paper money bureaucracy, as well as to reduce currency counterfeiting instead of going to punish those trading the digital currency with the crime of money laundering.

Al-Dobardani defines digital currencies as currencies issued by the state through central banks, and they have a different security system than the encrypted digital currencies, which are known as “non-state currencies”, issued by companies and individuals, and they are not ready to be obtained except through the mining process through which they are entered. New currencies are in circulation, via sophisticated computers that solve very complex mathematical problems.

support

The specialist in combating banking money laundering, Abdul Rahman Al-Sheikhly, supports the decision of the Central Bank of Iraq, and tells Al-Jazeera Net that digital transactions depend entirely on a sophisticated electronic system that is subject to the highest cybersecurity standards, at a time when the Iraqi banking system needs a continuous technological update, for this decision was the prevention of Well, according to Sheikhly.

In Iraq, there are more than 80 governmental and private banks (commercial and Islamic), in addition to branches of foreign banks that have a fairly good electronic system, according to Al-Sheikhly,

but he says that the largest cash flow, which reaches 80%, is limited to the two government banks, “Al-Rafidain and Al-Rasheed” that deal so far.

With paper records in documenting their banking transactions, then how can it deal with digital currencies whose value has moved within a few months - if not weeks - between 15-50 thousand dollars for one digital currency.

Al-Sheikhly identifies ways of successful dealing in Iraq with the digital currency by setting up a mechanism to link it with one of the basics of money such as gold, oil, or any other strategic material so that it can compete with other virtual currencies that will appear.



Paper money has become one of the most rapid ways to spread the Covid-19 virus (Al-Jazeera)

Iraqi banking

With the aim of avoiding the banking sector in particular and the Iraqi economy in general, the negative effects of money laundering and terrorist financing crimes; The Central Bank of Iraq - according to the specialist in Iraqi banking, Dr. Rajaa Al-Bandar - has sought to take many deterrent measures and implement the relevant laws to combat money laundering crimes that threaten financial stability in Iraq.

Al-Bandar adds to Al-Jazeera Net that the Central Bank of Iraq and the Office for Combating Money Laundering and Terrorism Financing in Iraq, which enjoys complete independence of work, have made great progress in improving and addressing deficiencies, and fulfilling all of its obligations towards the directions of the International Financial Action Task Force (FATF), which was officially announced in 2018. Iraq is from the follow-up area, also according to the report of the International Financial Action Task Force for the Middle East (MENA FATF).

With regard to the banking sector - as part of the requirements of the International Financial Action Organization, which includes in addition to the banking sector non-banking financial institutions and non-financial businesses and professions - the level of banks is good compared to the rest of the sectors, especially banks that have external participation.

The banking specialist revealed a weakness in some Iraqi banks in terms of non-compliance with international rules and standards, which need development and follow-up due to continuous updating of requirements and development in international standards, but this will not affect the work of the Iraqi banking sector.

While Al-Sheikhly says that the Central Bank of Iraq has lost an important and large part of its influence in drawing monetary policy during the past few period, after changing its executive management after handing over its affairs to the Ministry of Finance, which made it a prisoner of its policies drawn up by former Finance Minister Ali Allawi, as he put it.

Source: Al Jazeera

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