The era of the digital republic has begun. Iraq is cashless, and the Central Bank imposes its authority as the "ruler of the country."
With increasing pressure on cash liquidity in Iraq, the government has begun expanding its reliance on electronic payment systems within state institutions. This move, which may appear on the surface to be a technical measure to modernize transactions, is essentially linked—according to experts—to an attempt to contain a growing financial crisis by reducing reliance on paper money and keeping as much of the money within the banking system as possible.
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Al-Tamimi: The decision is not an administrative update, but rather an attempt to control liquidity.
Nasser Al-Tamimi, a financial and economic expert, confirmed to Baghdad Today that "the government's decision to impose electronic financial transactions within institutions is not merely a regulatory move, but rather a direct response to the cash liquidity crisis the country is currently suffering from." Al-Tamimi explained that "the government seeks to reduce demand for cash by converting transactions into digital electronic formats, which will ease pressure on the public treasury."
He added, "The crisis may push authorities to make new decisions, such as imposing electronic payments in broader sectors outside of state institutions, or even restricting the withdrawal of full salaries from credit cards, allowing employees to withdraw only a portion while the remainder remains within the banking system." He noted that "such measures are typically used in countries facing severe liquidity shortages, but they could spark widespread controversy if implemented without prior preparation."
Saleh: The economy is moving from financial dominance to monetary influence.
In a deeper reading of this trend, Dr. Mazhar Mohammed Saleh, the Prime Minister's advisor for economic affairs , believes in his latest statements that Iraq is witnessing a gradual shift in the balance of power between fiscal policy (concerned with spending and revenues) and monetary policy (concerned with liquidity management and stability), in what he calls "soft monetary dominance."
Saleh says, "The Central Bank of Iraq has begun to play a pivotal role in managing macroeconomic balances, after years of pressure to directly finance the budget deficit." He points out that "this shift does not mean the bank is monopolizing economic decision-making, but rather indicates a decline in the dominance of traditional fiscal policy, which was based entirely on oil revenues."
He continues: "In light of weak non-oil revenues and the state's ballooning liabilities, fiscal policy is no longer able to adapt to periodic shocks, forcing the Central Bank to bear the brunt of the burden by managing the exchange rate, injecting liquidity, and intervening in the market." He believes that this transformation is taking place gradually and flexibly, so that monetary policy does not lose its independence, as guaranteed by Law No. 56 of 2004.
Overlapping policies and resorting to unconventional tools.
Saleh points out that one manifestation of this phase is the use of electronic payment tools as an indirect means of circulating cash and easing pressure on the paper currency. He explains that "transforming transactions to a digital system enables the state to keep liquidity under control and gives the central bank room to maneuver in the face of inflation and market fluctuations, without resorting to printing currency or excessive monetary expansion."
However, this overlap between monetary and fiscal policy is not new. The central bank has previously used tools such as bond discounting and indirectly financing the government, which undermined its independence in previous periods. What's new today, according to Saleh, is that the bank has become more disciplined and is showing a resistance to overstepping its boundaries, even if it conflicts with the expansionary policies desired by the executive branch.
Will the state succeed in this transformation?
Observers believe that the success of this path depends on the state's ability to ensure a balance between imposing electronic tools and achieving financial and social justice. Digital payment systems cannot be imposed without improving infrastructure and creating genuine confidence in the banking system, especially in rural areas and regions that lack regular access to banking services.
Al-Tamimi also warns that any attempt to restrict cash withdrawals without realistic alternatives could lead to the creation of a parallel market or raise people's fears of losing control over their money. He adds, "If the state wants this approach to succeed, it must clearly clarify its objectives and ensure citizens' protection from any exploitation or banking loopholes."
Between a pressing liquidity crisis and the Central Bank's attempt to impose new stability rules, Iraq appears to be moving toward a "soft monetary model," in which the state attempts to regulate the economy through electronic rather than traditional tools. However, this path, while necessary, requires a delicate balance between reform and gradualism, and between authority and trust, to prevent the move from becoming a new burden on citizens rather than a way out of an old crisis.
Cash payment ban in government institutions
Saleh Salman, the Prime Minister's advisor for financial affairs, announced that "the government has appointed Ernst & Young to prepare a plan to restructure six to seven state-owned banks," indicating that "the plan will be presented to the government for approval before the end of the current year."
In a press statement, Salman indicated that the government will begin implementing a comprehensive ban on cash payments within government institutions starting early next month, as part of its efforts to enhance financial inclusion and governance.
He added, "Iraq has made significant progress in adopting electronic payment systems, with the number of bank accounts increasing to approximately 22 to 23 million," noting that "Baghdad is currently cooperating with approximately 30 foreign banks, reflecting an improvement in the confidence of international financial institutions in the Iraqi banking sector."
Converting an Iraqi bank into "Rafidain First Bank"
Prime Minister's advisor, Saleh Salman, announced on Monday that the government has decided to transform Rafidain Bank into "Rafidain First Bank," as part of a plan to restructure the banking sector and reduce state involvement .
Salman said in a statement to the official agency, followed by the "Al-Sa'a" network, that "Rafidain Bank, which is the largest government-owned banking institution in Iraq, will be transformed into (Rafidain First Bank), with the government's shareholding reduced to less than 24%, while the remaining shares will be offered to private banks and international investors ."
He added, "The restructuring plan is expected to be completed and approved by the Iraqi government by the end of this year."
Iraq joins the club of advanced countries in electronic payments with 22 million bank cards.
Al-Najjar said in a press statement, "The electronic payment project was not a spur-of-the-moment project. Rather, it was the result of prior preparations that paved the way for Iraq's advancement in this field, despite its late entry, like the rest of the world. However, today we are among the advanced countries that use electronic payment tools."
He explained that the success of this project depended on two key factors: desire and decision-making, adding, "The government's desire came in 2023, specifically on January 18, with a decision to transform Iraq's economic front from a paper-based cash system to an electronic payments system. Thus, we began gradually."
He pointed out that the first experiment to impose the use of electronic payment was at gas stations, saying, "The first experiment was on a single day in June 2023, regarding the issue of forcing gas stations to use electronic payment tools. We certainly encountered problems at first. The project is new and faces many challenges."
He pointed out that "the will was vested in the Central Bank of Iraq and the financial sector as a whole—banks and electronic payment companies, which have contributed significantly to shifting the economy from cash to cashless."
He continued: "The number of cards, according to the statistics available to us, has exceeded 22 million, and thus this number is constantly increasing. The coming days will witness a higher rate of increase, given that on July 1, cash will no longer be accepted at all state institutions. While cash is currently available, it will be available in its entirety, including at gas stations."
Regarding card usage, Al-Najjar explained that "the number of cards in use exceeds 17 to 18 million, and the situation is on the rise. We're talking about more than 40% of citizens using electronic payment tools, and the coming days will witness further change."
He added, "Most citizens own more than one card from more than one company and more than one bank. Their use is limited, and some only use them at government institutions. We need to educate more about the use of these cards in commercial markets and shops. This issue falls on us to raise awareness about the culture of electronic payment."
In this context, Al-Najjar announced a new campaign to spread the culture of electronic payment, saying, "I announce that the "We Will Reach You" campaign, which was launched on January 11, 2025, will be available in the coming days, at the beginning of next month or the end of this month. We will be present in the Kurdistan Region to spread the culture of electronic payment widely."
He explained that Iraq is striving to achieve global standards in this field, saying, "The global system speaks of one POS device for every 37 citizens. Today, in Iraq, we are striving to reach this point by deploying POS devices in shops, large and small markets, and even among kiosk owners."
He pointed out that "electronic payment companies are trying to make these devices available and encourage their use by citizens through loyalty programs launched by companies and banking institutions."
Regarding the situation in the Kurdistan Region, Al-Najjar said: "Today, the Kurdistan Region has entered the localization phase, so the POS deployment phases will be faster and more acceptable to the public, given that they have already gone through this experience in previous phases, but today it is becoming widespread."
He explained that the devices are often distributed free of charge, and that sometimes a small insurance fee of no more than 200,000 to 300,000 dinars is imposed, which is refunded when the device is returned without defects.
Al-Najjar considered Halabja Governorate to represent a strategic launch for the "We Reach You" campaign, explaining: "Today, Halabja Governorate is a new Iraqi governorate. We used to have 18 governorates, now we have 19. Therefore, our people in the Kurdistan Region have a significant share of the electronic payment culture."
He continued: "Choosing Halabja Governorate to launch the "We Will Reach You" campaign from this governorate is a move towards the Kurdistan Region, and also the northern regions of Iraq. I mean here the areas bordering the Kurdistan Region: Mosul, Kirkuk, Salah al-Din, and also the other governorates."
Al-Najjar confirmed that this campaign is being directly sponsored by the Central Bank of Iraq and supported by several financial institutions, including the Bank of Baghdad, the Development Bank, Arab Bank, K-Card, Rafidain Bank, Al-Saqi Bank, Bank of the South, Amwal Bank, Al-Ahli Bank, and others.
He concluded his remarks by pointing out that "banking financial institutions and electronic payment companies are sparing no effort to motivate citizens through loyalty programs, under the direct supervision of the Central Bank of Iraq, the Payments Department, the Financial Inclusion Division, and other relevant departments, with the goal of delivering financial services directly to citizens."
Iran will present its nuclear proposal to the United States via Muscat.
Iran said on Monday it would soon present its proposal for a nuclear deal with the United States, after describing Washington's offer as containing "ambiguities."
"We will soon present our proposal to the other side via the Sultanate of Oman once it is finalized," Iranian Foreign Ministry spokesman Esmail Baghaei told a news conference. "It is a reasonable, logical, and balanced proposal, and we strongly recommend the American side seize this opportunity."
Last week, Iranian Supreme Leader Ayatollah Ali Khamenei said abandoning uranium enrichment was completely against the country's interests, rejecting a key US demand in talks aimed at ending a decades-long dispute over Tehran's nuclear ambitions.
Oman presented the US proposal for a new nuclear agreement to Iran.
Muscat is mediating talks between Iranian Foreign Minister Abbas Araqchi and President Donald Trump's Middle East envoy, Steve Witkoff.
After five rounds of talks, several issues remain unresolved, including Iran's insistence on continuing uranium enrichment on its own soil and its refusal to ship its entire stockpile of highly enriched uranium abroad. Uranium is a raw material that can be used to make nuclear bombs.
Khamenei, who has the final say on all state matters, made no mention of halting the talks but said the US proposal "runs counter to our nation's belief in self-reliance and the 'We Can' principle."
"Uranium enrichment is the foundation of our nuclear program, and the enemies are focusing on enrichment," Khamenei said in a televised speech marking the anniversary of the death of Ayatollah Ruhollah Khomeini, the founder of the Islamic Republic of Iran.
"The US proposal is completely contrary to our interests... America's impudent and arrogant leaders repeatedly demand not to have a nuclear program. Who are you to decide whether Iran should enrich?"
Tehran says it wants to possess nuclear technology for peaceful purposes and has consistently rejected accusations by Western powers that it is seeking to develop nuclear weapons.
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Trump: Washington and Tehran will hold a new round of talks on the Iranian nuclear issue on Thursday.
US President Donald Trump announced that the United States and Iran will hold new talks on the Iranian nuclear program on Thursday, after Tehran said it would present its proposal for a possible agreement "soon." Asked about receiving an Iranian counterproposal for a possible agreement, Trump told reporters, "We have a meeting with Iran on Thursday, so we'll wait until Thursday." However, the American website Axios reported on Monday, citing an unnamed US official, that the sixth round of nuclear talks between the United States and Iran will be held either on Friday in Oslo or Sunday in Muscat.
Negotiations are stalled on the issue of uranium enrichment, after a US proposal apparently failed to convince Tehran. Trump said, "They want to enrich (uranium), they can't enrich." The two countries have held five rounds of Omani-mediated negotiations since last April, seeking an alternative to the 2015 international agreement with Iran to curb its nuclear program in exchange for sanctions relief. Trump abandoned that agreement during his first term in 2018. Iran insists it has the right to enrich uranium under the Nuclear Non-Proliferation Treaty, while the US administration considers Iranian uranium enrichment a "red line."
Meanwhile, Iranian Foreign Ministry spokesman Esmail Baghaei said on Monday that his country would "soon send its own proposal, once completed, to the US side via the Sultanate of Oman." He considered Iran's response to be "reasonable, logical, and balanced," calling on the US side to "seize this opportunity and seriously consider the proposal," stressing that accepting it "would be in the interest of the United States."
In the same context, Tasnim News Agency reported, citing informed sources, that Iran will submit its official response to the US proposal regarding the agreement within the next two days. This response will be written and sent through diplomatic channels. The sources revealed to Tasnim that Iran will present a proposal for the agreement in its response that guarantees the preservation of the principle of enrichment on Iranian soil, with Tehran taking measures to reassure the United States and remove its concerns in exchange for the "effective lifting" of sanctions. The same sources, whose identities were not revealed, added that Iran also expressed its willingness to hold a new round of indirect negotiations with the United States, provided that the US side adheres to Iran's red lines.
On Monday, the Hebrew newspaper Israel Hayom revealed a phone call between Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump that lasted about 40 minutes. Israel Hayom reported: "The phone call between Netanyahu and Trump, which lasted about 40 minutes, has ended," without providing further details. Last Wednesday, Israeli Army Radio said that the upcoming call would focus on the Iranian nuclear project, as Washington awaits Tehran's response to a proposal to push for an agreement. The radio added at the time that Netanyahu is scheduled to hold a small security meeting immediately after the call with Trump.
In recent weeks, the Trump administration has expressed concern about the possibility of Israeli military action despite ongoing negotiations. This prompted Trump to warn Israeli Prime Minister Benjamin Netanyahu against taking unilateral action, but he also indicated that his position "could change with a phone call" if it became clear that negotiations were not progressing.
Most notably, the ban on cash payments... Iraq is taking a series of steps in addition to banking and financial reform.
Prime Minister's advisor, Saleh Salman, announced on Monday that cash payments at government institutions will be banned starting next month, while noting that reforms will be implemented in the private banking sector.
“The Iraqi government has appointed Ernst & Young to restructure 6-7 state-owned banks in the country, including the Industrial Bank, the Real Estate Bank, Rafidain Bank, and Rashid Bank,” Salman told the official agency, followed by “Iraq Observer.” He indicated that “the Trade Bank of Iraq (TBI) signed a separate contract with K2i and KPMG to help restructure its internal and external operations to meet international standards.”
He added that "Rafidain Bank, the largest government institution in Iraq, will be transformed into Rafidain First Bank, with the government's stake reduced to less than 24 percent. The remaining shares will be offered to private banks and international investors." He expected that "the restructuring plan will be completed and approved by the Iraqi government by the end of the year."
He added that "the private banking sector will undergo reforms following the signing of a contract between the Central Bank of Iraq and Oliver Wyman." He explained that "the results of this project, which will extend over two to three years, will yield recommendations for private banks to either exit the sector, comply with international standards, or merge with other institutions."
Regarding electronic payments, Salman emphasized that "Iraq has made significant progress in adopting electronic payment systems, with financial inclusion rising from less than 10 percent in 2018-2019 to approximately 40 percent currently." He noted that "the number of point-of-sale devices has reached 60,000-70,000, while the number of bank accounts has increased to 22-23 million."
He explained that "starting in July 2025, all government payments will be made electronically, prohibiting cash payments through government institutions," noting that "the government has launched awareness campaigns to encourage the public to adopt electronic payment systems and move away from the traditional cash-based culture."
He stressed that "the government has launched the 'Riyada' programme, in partnership with the Central Bank, to provide financing and training for small and medium-sized enterprises," explaining that "this programme provides a registration platform through which participants can access training and potential financing opportunities."
He pointed out that "Iraq will remain open to foreign investment and international consulting services in all sectors, including legal, financial, accounting, auditing, and compliance services," noting that "government reforms aim to integrate Iraqi banks into the global financial system after decades of isolation due to sanctions and frozen assets."
He continued, "Since November 2022, all bank transfers in Iraq have been processed through the Central Bank's platform in cooperation with the US Federal Reserve, marking Iraq's re-entry into the global financial system." He noted that "the country now cooperates with approximately 30 foreign banks."
He explained that "challenges still exist in opening international banking relations," stressing that "comprehensive banking reforms represent a major shift toward international standards and increased private sector participation in the Iraqi financial sector."
Iraq’s Oil Dependency Pushes Economy to the Brink, Experts Warn
“The government remains trapped under the weight of economic mismanagement and high unemployment, blocking any meaningful development or growth,” The Iraqi economic expert Mohammed Husseini warned.
Iraq’s heavy reliance on oil revenues and sustained high public spending have pushed the country to the edge of an economic breakdown, according to economic experts and official data.
Iraq’s Ministry of Finance announced that the federal budget revenues for 2024 reached over 140 trillion dinars (approximately $107 billion). Of this, a staggering 91%—nearly 127.5 trillion dinars—came from oil exports, while non-oil revenues made up only 13.2 trillion dinars, highlighting the country’s dangerous dependence on a single income source.
At the same time, public expenditures remain high, totaling 125.2 trillion dinars this year, raising concerns about Iraq’s ability to sustain economic stability amid volatile oil markets and ongoing political uncertainty.
The Iraqi economic expert Mohammed Husseini told Kurdistan24 that Iraq’s budget composition reveals the depth of its structural vulnerabilities. “The government remains trapped under the weight of economic mismanagement and high unemployment, blocking any meaningful development or growth,” he warned.
“To ensure long-term economic stability, Iraq must diversify its revenue streams, reduce public expenditures, and respond to fiscal deficits more effectively,” Husseini added.
The warning echoes previous statements by Muzher Mohammed Saleh, a financial advisor to the Iraqi Prime Minister, who attributed Iraq’s economic stagnation to persistent insecurity and ongoing political instability. These factors, he argued, have caused fluctuations in national income and hindered economic recovery.
Experts are increasingly sounding the alarm over Iraq’s failure to reduce its dependence on oil, especially as global oil prices remain unpredictable due to shifting political dynamics and market instability. Oil prices have historically been subject to wide fluctuations, which in turn make Iraq’s financial planning highly vulnerable.
Despite repeated calls for reform, the Iraqi government has struggled to manage its sovereign wealth funds and implement structural changes that could steer the economy toward sustainability. Subject matter experts say the country’s inability to strengthen non-oil sectors such as agriculture, tourism, and industry reflects a broader institutional weakness.
Iraq, one of the world’s leading oil producers, has long relied on petroleum exports to fund the majority of its budget. However, this dependency has left the country exposed to global oil price shocks. Following years of conflict, political turmoil, and governance challenges, Iraq continues to grapple with high unemployment, low foreign investment, and a fragile security environment.
Despite ambitious reform agendas presented by successive governments, Iraq remains caught in a cycle of oil-based revenues, ballooning public sector wages, and insufficient infrastructure investment—a combination that many economists now say could lead to a fiscal and economic crisis if unaddressed.
As reconstruction and recovery remain urgent priorities, Iraq faces the pressing task of transitioning from an oil-dependent economy to a more diversified and resilient one. Without meaningful reform, experts warn the nation may remain in a permanent state of economic limbo.
13,000 Iraqis win prizes on the fourth day of Eid
Your Eidiya is on us... It concludes its first tour with a lot of success and joy!
In the spirit of Eid al-Adha, Rafidain Bank today concluded the distribution of the final batch of rewards from its "Your Eidiya is on Us" campaign, announcing the addition of 13,109 new winners on the fourth day of Eid, rewarding their interaction with electronic cards for savings and shopping.
This brings the total number of customers who received rewards during the four days of Eid to more than 52,023, making this campaign one of the largest digital incentive initiatives in Iraq.
The campaign targeted Rafidain Bank customers who use e-cards the most, as part of the bank's vision to instill a culture of smart payments and encourage the transition from paper cash to seamless and secure digital transactions.
Rafidain Bank confirms that this initiative will not be the last, but rather the beginning of a series of surprises and gifts to come that will be bigger, broader, and more distinctive!
This campaign aligns with the bank's efforts to enhance financial inclusion, provide modern digital services that meet customer expectations, and support the national digital transformation in the financial and banking sector.
Because you deserve the best... and with Rafidain, the rewards continue... and the next step is electronic!
Securities: We are working to enhance the attractiveness of the Iraqi market through governance and expanding the corporate base.
The Securities Commission announced on Monday that it is working to enhance the attractiveness of the Iraqi market through governance and expanding the corporate base. It also indicated a move to list new companies to encourage profitable investments.
Iraq to become "a Massive Success Story"
Iraq is experiencing unprecedented stability and security, creating significant opportunities for international businesses, according to Abir Burhan, Company Director of Al-Burhan Group (ABG), speaking at the Iraq Britain Business Council (IBBC) Spring Conference in London.
Burhan outlined how the operating environment has transformed dramatically over the past year, with the Iraqi government actively inviting international investment and reducing hostility towards foreign businesses. "We've been through the worst of it, and we finally see that Iraq is becoming really stable and secure," he told delegates.
ABG has positioned itself as a facilitator for international companies entering the Iraqi market, partnering with established firms including Menzies Aviation and Air BP to operate ground fuelling services at Iraqi airports. The company has achieved international operational standards with no reported incidents, demonstrating the viability of high-quality service delivery in the country.
"We allow companies to operate in a safe environment, to actually do their job, rather than worrying about the hurdles of dealing with the Iraqi infrastructure," Burhan explained.
The group has made substantial investments in Iraq's infrastructure over the past two years, including:
- A 300-room hotel development near Baghdad airport
- Construction of 1,200 affordable housing units in Wasit province
- Establishment of an operations centre to support international business activities
Burhan noted that ABG's security division has experienced reduced demand over the past year, which he views as a positive indicator of improving conditions. "We don't mind our security company not being busy, because we know that there are big advantages for businesses as well," he said.
The Operations Director expressed optimism about Iraq's economic prospects, predicting the country will become "a massive success story" within the next five to ten years. He emphasised the current government's commitment to attracting international investment and the noticeable improvement in security conditions.
Burhan acknowledged the pivotal role of the Iraq Britain Business Council in facilitating international business opportunities in Iraq over the past decade, describing their work as instrumental in bringing projects to fruition despite various challenges.
The comments reflect growing confidence in Iraq's business environment as the country continues to rebuild and modernise its economy following years of instability.
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Why Is Iraq’s Printed Dinar Dropping in Value?
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