Iraq Economic News and Points to Ponder Tuesday AM 3-25-25

Iraq Confronts Economic Crises With Digital Dinar, Parallel Market Threatened With Extinction
 
Reports  Economy News – Baghdad  The Central Bank of Iraq is preparing to launch the digital dinar, 
marking the transition to digital currency management. The  digital dinar is a digital currency issued by the central bank,  officially part of a country's monetary system.
 
It is  similar in value to the traditional dinar, but is   traded electronically via digital wallets or approved financial applications.

It
 
     facilitates instant money transfers within the country or across borders,
     reduces the logistical burden of issuing paper or metal currency, and
     enables broader segments of society to access digital financial services.
 
This project comes in light of the 
significant economic challenges facing Iraq, such as its
 
     heavy reliance on paper money and the phenomenon of
     hoarding.
 
The digital dinar aims to address these challenges by providing a safe and effective digital alternative to paper money.
 
Central Bank Governor Ali Al-Alaq had previously stated during a speech he delivered at the Finance and Banking Conference and Exhibition that
 
"the financial and banking system will witness fundamental transformations, including the
 
     decline of paper currencies and their
     replacement by digital payments for central banks." He explained that
 
"the Central Bank is moving to create its own digital currency, which will gradually replace paper transactions, as is the case with some central banks around the world."
 
Mazhar Saleh Mohammed, the Prime Minister's advisor for financial and banking affairs and former deputy governor of the Central Bank,
 
highlighted the
 
     importance of the digital dinar and
     its relationship to the dollar exchange rate in local markets.

Speaking to Al-Eqtisad News, Mohammed emphasized that the
 
digital dinar is a global trend in the development of payment systems, particularly in the description of monetary units that will acquire digital rights bearing the same legal force issued by the monetary authority as banknotes in the discharge of debts, as
 
they are units of
 
     account,
     exchange, and
     storage of value
 
within the digital economic community and via a highly sophisticated, rapid, and accurate information system.

He added that these monetary units will be used with
 
     high transparency to
     cover various real transactions of goods and services, as well as to
     settle small and large obligations. He noted that
 
all exchange transactions will be transparently recorded between traders, up
to the point of purchasing a loaf of bread, under the supervision of the monetary authority, thus
 
ending the ambiguous or illegal uses of money once and for all.
 
Regarding the digital dinar's relationship to exchange rates,
 
Al-Sudani's advisor explained that the
 
official exchange rate will be the prevailing and sole rate, the digital exchange rate adopted by monetary policy.
 
The parallel market will disappear in its current form, as
 
it is difficult to invent a secondary digital market whose operations operate outside the control of the digital monetary authority. However,
 
usurious digital markets may emerge among the same traders. He pointed out that the
 
digital cash system provides the banking system with sufficient digital cash liquidity to grant loans without the risk of liquidity risk within banking markets.

This
 
     encourages investors to borrow easily,
     increases economic growth levels, and
     promotes sustainable development. It also
     facilitates access to global digital exchanges for global payments and settlements.
 
"Introducing digital currency requires two things," according to the Prime Minister's advisor. He explained that the
 
first is a high level of public awareness of the digital monetary system, while the
 
second is the availability of an advanced information, communications, and data technology infrastructure that evolves continuously over time. He pointed to the
 
need for a legal infrastructure to protect digital currency transactions, particularly in
protecting the rights of users to their income and wealth, which
cybersecurity provides against any dangerous digital breaches.
 
Many questions are being raised about the digital dinar and its differences from cryptocurrencies, which economic expert Ziad Al-Hashemi answers. Al-Hashemi points to
 
a "significant difference" between digital currencies and cryptocurrencies:
 
"The former are issued and regulated by central banks, such as the digital dollar and the digital dirham, while
 
cryptocurrencies such as Bitcoin are not subject to any official authority and
 
their value depends on supply and demand, making them highly volatile." He stated that
 
if the Central Bank of Iraq issues the digital dinar,
 
it will be the sole entity
 
     controlling the issuance and distribution of the digital currency,
     facilitating oversight and
     preventing financial crimes,
 
unlike cryptocurrencies, which operate on a decentralized system that is difficult to control. He pointed out that the
 
digital dinar will be fully backed by the central bank and have a relatively stable value, similar to paper currency.

However, it will be
     traded electronically only through bank accounts and wallets, contributing to
     reducing the use of paper money,
     achieving financial inclusion, and
     reducing reliance on the dollar in daily transactions. Al-Hashemi noted that the
 
primary goal of this step is to eliminate the phenomenon of cash hoarding, whereby citizens hold large sums of money outside banks due to lack of confidence in the banking system.
 
This hinders the flow of funds and negatively impacts economic activity.
 
If the project implemented well, the
 
digital dinar could help

     disburse hoarded liquidity and

     stimulate lending and credit.
 
views 1872     Added 03/17/2025 - 10:31 AM    
  
https://economy-news.net/content.php?id=53480   

Rafidain Bank Director: Money laundering poses a direct threat to economic systems.
 
March 24, 2025

Baghdad/Iraq Observer
 
Rafidain Bank's General Manager, Ali Al-Fatlawi,
highlighted the importance of the AML system in enhancing financial transparency, noting that
 
the bank has taken important strategic steps in the field of combating money laundering and terrorist financing. “In light of the
 
escalating challenges associated with financial crimes globally, anti-money laundering (AML) systems have become a top priority for financial institutions and governments, as
 
they are the cornerstone of protecting the integrity of financial markets and enhancing economic stability,” said Ali Al-Fatlawi, General Manager of Rafidain Bank, in a televised interview followed by “Iraq Observer.”  

He indicated that
 
“with countries committed to implementing strict international standards in this area,
 
Rafidain Bank stands out as a leading Iraqi financial institution that has adopted the latest monitoring and compliance systems,
 
which strengthens Iraq’s position in the global financial system.”
 
Regarding the importance of the anti-money laundering system and its role in financial stability, Al-Fatlawi explained that
 
“money laundering poses a direct threat to economic systems, as
 
it enables illegal activities to integrate into the financial system,
leading to monetary instability and weakening economic policies.” He added,
 
“For this reason, financial institutions implement strict measures to ensure compliance with global standards, such as the Financial Action Task Force (FATF) recommendations, which establish a comprehensive framework to combat these financial crimes.” He pointed out that
 
“the Anti-Money Laundering (AML) system aims to prevent, analyze, and detect suspicious financial activities,
 
through mechanisms that include:
 
- Customer identity verification (KYC) to ensure knowledge of the true sources of funds.
 
- Monitor financial transactions to detect any unusual activity.
 
- Immediately report suspicious transactions to regulatory authorities.

-Using modern technology in financial analysis to enhance the efficiency of detecting illegal activities.” He continued,
 
"These practices not only
     enhance the transparency of financial markets, but also
     contribute to raising countries' financial ratings and
     improving the business and investment environment." He explained that
 
"Rafidain Bank, as a banking institution with a significant market share in Iraq,
 
continues its pioneering role in developing the local banking infrastructure in accordance with the latest international standards." He emphasized that "in recent years,
 
the bank has taken significant strategic steps in the field of combating money laundering and terrorist financing,
 
reflecting its unwavering commitment to enhancing financial transparency and achieving full regulatory compliance."
 
Regarding the launch of the Anti-Money Laundering (AML) system, he stressed that “in a qualitative step,
 
Rafidain Bank announced the launch of an advanced system to monitor daily banking transactions across its branches,
 
making it the first Iraqi bank to adopt this regulatory approach in accordance with the latest global banking technologies.” He noted that
 
“this project was implemented in partnership with specialized international institutions, as
 
it aims to analyze and track all financial transactions in real time, which contributes to
 
enhancing the level of banking security and

combating any illegal attempts at money laundering.” He explained that
 
"the system's first phase included six major branches of regulatory importance, including Al-Waziriyah, Al-Muheet, Al-Rafie, Al-Dura Oil Complex, Zurbatiyah, and Safwan,
 
with the plan to gradually expand to the remaining branches.

This system is characterized by its ability to:
 
-Identify suspicious financial activities immediately, enabling rapid response.
 
- Analyzing big data and its cross-reference with international sanctions lists, ensuring full compliance with regulatory standards.
 
-Improving financial audit efficiency by shifting from paper-based processes to smart digital systems. He pointed out that
 
"this initiative confirms that Rafidain Bank is adopting a proactive approach to combating financial crimes, which strengthens its position as a trusted banking institution within Iraq, regionally, and internationally."
 
Regarding the economic and regional repercussions of adopting AML systems in Iraq, Al-Fatlawi explained,
 
"Rafidain Bank's commitment to best practices in combating money laundering leads to strategic outcomes that extend beyond the bank itself to encompass the Iraqi economy as a whole.
 
Advanced banking systems that adopt cutting-edge AML technologies enable:
 
- Achieving financial stability by preventing illicit money flows, which may negatively impact cash liquidity and price fluctuations.
 
- Strengthening international banking relations, as compliance with global standards enhances opportunities for establishing partnerships with foreign correspondent banks, facilitating the smooth flow of financial transfers and foreign investments.
 
- Stimulating foreign direct investment, as international investors seek safe financial environments free from regulatory risks.
 
- Improving Iraq's global financial reputation, which will contribute to raising the Iraqi banking system's rating with international financial institutions. He continued,
 
"Rafidain Bank is at the forefront of banking transformation, as the
 
progress it has made in implementing anti-money laundering systems reflects its commitment to international standards and its keenness to protect the Iraqi banking sector." He indicated that
 
"by employing advanced financial technology, a strict commitment to transparency, and integration with international regulatory systems,
 
the bank continues its role as a pivotal financial institution in supporting financial integrity and economic stability." He continued,
 
"As the Iraqi banking sector continues its digital transformation,
 
Rafidain Bank's experience represents a successful model for balancing regulatory compliance with technological advancements,
 
paving the way for a more transparent and reliable banking future, both domestically and internationally."     https://observeriraq.net/مدير-مصرف-الرافدين-غسل-الأموال-يمثل-ته/  

For current and reliable Iraqi news please visit:  https://www.bondladyscorner.com/