Iraq plans digital currency to replace paper notes

• ‘Radical’ changes planned
• Data centre considered
• Country in digital transformation

Iraq’s central bank is planning to issue its own digital currency to gradually replace local paper notes.

The country’s central bank governor Ali Al-Allaq told a local press conference in Baghdad that the new currency is part of “radical” changes in the global financial and banking system.

“These changes include the decline of paper notes to be replaced by digital currencies issued by central banks,” Allaq said, quoted by the Baghdad Al-Youm news website and other Iraqi publications.

“The Iraqi central bank is now moving to create its own digital currency which will gradually replace paper notes, as is happening in some global central banks,” he said.

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Allaq said that the central bank is “seriously considering” establishing a data centre in Iraq and that it has started to move on this issue as part of digital transformation.

Iraq, a founding Opec member, imposed a ban on cryptocurrencies in 2017, citing risks such as financial crimes and terrorist funding.

In comments last year, Allaq said the central bank is moving towards a “digital economy and payments”. Iraq has more than $100 billion in foreign exchange reserves.