Exclusive to Kurdistan 24: US pressure on Baghdad to expedite the removal of zeros from the dinar to curb money laundering
Informed sources told Kurdistan24 today that the United States is exerting increasing pressure on the Iraqi government to expedite the implementation of the "removal of zeros from the Iraqi dinar" project, with the aim of crippling the movement of funds smuggled abroad and recovering cash liquidity hoarded through illegal means.
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According to exclusive information obtained by Kurdistan 24, the approval of this project will strip the old currency denominations of their legal tender value and stop their circulation as official currency, which will force the holders and smugglers of those funds to bring them in and deposit them exclusively through official banking channels inside Iraq to exchange them for the new denominations, which will ensure the reintegration of smuggled capitals into the national financial system.
A crucial tool for uncovering corruption and sources of funds
The sources explained that this step constitutes a trap and strict control over money laundering and corruption networks, as the exchange of large sums of cash in banks will be subject to thorough investigations into the "sources of funds" (Where did you get this from?), which directly contributes to exposing and holding accountable the figures who seized public money and stored it in cash or in bank accounts outside the borders of Iraq.
Iraq Revives Plans to Remove Zeros From Dinar
At a Glance
- The Finance Committee discusses currency reform
- The Central Bank has prepared new designs
- Reform would not change purchasing power
- The process could take up to seven years
Iraq has renewed discussions over a long-planned currency reform that would remove zeros from the dinar, with the Central Bank and Parliament examining the requirements for implementing the proposal.
Key Statements and Focus Area
- No change in value: The Finance Committee considers the removal of zeros an accounting and monetary reform rather than a change in the actual value of the currency. Under the proposal, removing zeros would simplify the figures used in commercial transactions, government budgets, and banking operations without changing the purchasing power of the dinar. The measure is also intended to reduce calculation and accounting errors associated with the large denominations currently used in Iraq.
- Banking system: One of the main objectives is to bring an estimated 8 to 10 trillion dinars currently outside the formal banking system back into circulation through banks. The information provided indicates that a large proportion of Iraq’s cash is held outside banks, creating challenges for liquidity management and efforts to track monetary flows. The proposed currency change is therefore also being viewed as part of a wider effort to strengthen the banking system and improve control over cash circulation.
The parliamentary Finance Committee has held discussions with the Central Bank of Iraq over the proposal to remove zeros from the Iraqi dinar and introduce redesigned banknotes. The proposal remains under discussion and has not received final political approval.
According to information obtained by Channel8, the Central Bank has completed preparations for the proposed currency, including the designs and specifications of the new banknotes. The Central Bank said preparations for the currency reform have been underway since 2012.
Final samples of the proposed banknotes have reportedly been prepared, covering all denominations. The plan would involve printing approximately 7.5 billion individual banknotes, with estimated costs of around 250 billion dinars. Germany, France, Australia, and the United Kingdom have reportedly been selected to handle production of the new currency.
The currency reform cannot proceed without a legal framework. The government would need to submit a special draft law to Parliament before the Central Bank could formally implement the currency change. If approved, the replacement process would be carried out gradually rather than through an immediate withdrawal of existing banknotes.
The full process is expected to take between three and seven years. Despite the Central Bank’s preparations, there has been no final decision to implement the currency reform. The project remains dependent on political approval and the passage of the required legislation.
FYI
Iraq has previously considered removing zeros from the dinar as part of efforts to modernize its monetary and banking system. Similar currency redenomination projects in other countries have generally involved exchanging old notes for new denominations while maintaining equivalent real values, meaning that removing zeros by itself does not create additional purchasing power.
The Central Bank’s earlier plans were linked to broader reforms aimed at reducing the amount of cash circulating outside banks and encouraging greater use of formal financial institutions. The success of such a reform would depend not only on replacing banknotes but also on public confidence, banking infrastructure, and monetary stability.
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Iraq to slash three zeros from currency, introduce new notes
It also aims to curb the use of cash outside the system, which may be used for criminal activities and corruption, he explained.
ERBIL, Kurdistan Region of Iraq – Iraq is set to remove three zeros from its currency in a bid to rebrand the dinar and support digitizing transactions to combat cash outside the system used for crime and corruption, a lawmaker said Monday.
Jamal Kocher, a Kurdish member of the Iraqi parliament's finance committee, told The New Region that Prime Minister Ali al-Zaidi “has requested removing zeros from the bills. If this happens, it means that 1,000 dinars will become one dinar, 25,000 dinars will be 25 dinars.”
Earlier in August, Communications Minister Mustafa Sanad confirmed that the decision to remove the zeros and change the currency had been made.
The Central Bank of Iraq, however, has yet to formally announce a timetable for the process.
Iraq added zeros to the dinar when it was heavily sanctioned toward the end of the rule of former dictator Saddam Hussein, Kochar noted, explaining that adding zeros to a currency is an indication that it is degrading.
Asked about Iraq’s rationale for the overhaul, the lawmaker said that some neighbouring countries have taken legitimate Iraqi bills and sent back copied versions, and that smaller amounts, like cents, are needed in the market.
It also aims to curb the use of cash outside the system, which may be used for criminal activities and corruption, he explained.
“Any crime that is committed in the world, whether it is murder, organized crime, money laundering, or trading opium and hashish and those things, is all committed through money that does not go through the banking system,” said Kochar.
“Guarantees may be put in place for those using digital transactions so the currency stays under the government’s control while transparency emerges,” he stressed.
According to the lawmaker, the change will not affect people’s daily lives or purchasing power. Prices will remain fixed while the zeros are removed and smaller amounts are introduced. People may exchange the older version for the new one.
Previously, only France and Germany printed Iraqi dinars, but now the government has also approached the United Kingdom and Australia in a bid to speed up the process
Another version
Iraq to strip three zeros from dinar in currency overhaul
Iraq plans to remove three zeros from the dinar and introduce redesigned banknotes, in a redenomination intended to rebrand the currency and push more transactions into the formal banking system, a member of parliament's finance committee said, The New Region reported on August 24.
The overhaul, which would turn IQD1,000 into a single dinar, marks Baghdad's most concrete move yet on a reform floated for over a decade, and comes as the government of Prime Minister Ali al-Zaidi works to end the parallel market in dollars and curb cash circulating outside the banks.
Jamal Kocher, a Kurdish member of the finance committee, said al-Zaidi had requested the removal of the zeros, meaning IQD1,000 would become one dinar and IQD25,000 would become 25 dinars.
Communications Minister Mustafa Sanad confirmed earlier in August that the decision to remove the zeros and change the currency had been taken, Kocher said. The Central Bank of Iraq has yet to announce a formal timetable for the process.
Iraq added zeros to the dinar when it was heavily sanctioned towards the end of Saddam Hussein's rule, Kocher said, describing the addition of zeros as a sign of currency degradation.
He said some neighbouring countries had taken genuine Iraqi banknotes and returned copied versions, and that the market needed smaller denominations equivalent to cents.
The change also aims to curb cash held outside the banking system, which Kocher said could be used for crime and corruption. "Any crime that is committed in the world, whether it is murder, organised crime, money laundering, or trading opium and hashish and those things, is all committed through money that does not go through the banking system," he said, cited by The New Region.
Kocher said the redenomination would not affect daily life or purchasing power, with prices held fixed while the zeros were removed and smaller units introduced, and the public able to exchange old notes for new ones. He said guarantees could be put in place for users of digital transactions to keep the currency under government control while improving transparency.
Iraq had previously relied on France and Germany to print its dinars but has now approached the United Kingdom and Australia to speed up the process, according to the lawmaker.
The move mirrors redenomination drives elsewhere in the region, with neighbouring Iran phasing out old banknotes in a four-zero overhaul of the rial, and Syria's central bank having begun its own redenomination at the start of 2026.
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