Crypto-funded debit card in Iraq
A card program where customer fiat balances are funded from crypto holdings, typically through an off-ramp at point of sale or top-up.
Crypto debit card is not permitted in Iraq.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- Not applicable — crypto activities are outright banned in Iraq; no legal crypto-to-fiat conversion path exists.
- If a financial institution were to detect a suspect crypto-linked transaction, it must report a Suspicious Transaction Report (STR) to the Iraqi AML/CFT Office (FIU) per Law No. 39 of 2015.
- Standard CDD/EDD obligations under Law No. 39 of 2015 apply to all financial institutions (identification, verification, beneficial ownership, ongoing monitoring).
- Record-keeping: minimum 5–10 years retention for transaction and customer identification records.
Key Restrictions
- CBI February 2021 and February 2023 directives prohibit all financial institutions and the public from dealing in, using, trading, or advertising cryptocurrencies.
- There is no licensing framework for VASPs, e-money issuers, or stablecoin issuers — stablecoins are banned.
- Law No. 40 of 2015 (Payment Systems and Services) governs e-money but does not permit crypto-linked products; a crypto debit card would be illegal.
- No partner bank or BIN sponsor in Iraq could lawfully support a crypto-funded debit card program.
Key Risks
- Criminal enforcement risk: arrest warrants have been issued for crypto trading activity (April 2022).
- Blanket prohibition means any attempt to operate — even with offshore structuring — exposes individuals/entities to legal consequences under AML/CFT law.
- No regulatory path to legalize this operating model in the foreseeable future; no CBDC or stablecoin pilot planned.
- Extreme reputational and operational risk — any detected crypto activity triggers investigation under financial crime laws.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Decree: In February 2022 (and reiterated earlier), the Central Bank of Iraq (CBI) issued directives prohibiting the use, trading, and advertising of cryptocurrencies within Iraq. The CBI considers cryptocurrencies to be highly volatile, prone to fraud, and lacking proper regulatory oversight, posing risks to the financial system and national security.
Implication: This ban means that there are no legally operating cryptocurrency exchanges or virtual asset service providers in Iraq. Any entity engaging in such activities within Iraq would be doing so illegally.
Central Bank of Iraq (CBI) Directives: The CBI has issued several circulars and statements prohibiting cryptocurrency activities. While direct English URLs to specific circulars on the CBI's often Arabic-only website can be challenging to find, these directives are widely reported by official Iraqi news agencies and international financial outlets.
No formal classification exists for stablecoins. Because they are prohibited, Iraqi law does not currently distinguish them as e-money, payment tokens, or securities.
No licensing framework exists. No entity can legally issue stablecoins in Iraq.
Original Ban Directive (2021)
Re-affirmation and Enhanced Warnings (2023)
Blanket Ban: Because crypto is outright banned, enforcement tends to fall under broader financial crime or anti-money laundering laws rather than specific crypto-related administrative fines.
Focus on Prevention: The primary "enforcement" has been through strong warnings and directives to prevent engagement rather than publicized actions against a large number of violators.
No specific reporting requirements for cryptocurrency for tax purposes. Because crypto activities are banned, the government does not require or accept reports on crypto holdings or transactions for taxation.
Law No. 40 of 2015 - Law on Payment Systems and Services: This law governs traditional and electronic payment systems and services in Iraq. While it defines "e-money" and payment service providers, stablecoins are not explicitly covered or permitted under this law, given the general ban. If stablecoins were ever to be permitted, they would likely be forced to fit within the definitions and licensing requirements of this law or a new specific framework.
Central Bank of Iraq (CBI): The CBI is the primary regulator and supervisor for banks and other financial institutions in Iraq. It issues directives and guidelines related to AML/CFT for entities under its supervision and enforces compliance. It also issued the direct ban on cryptocurrencies.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Not permitted — Iraq maintains an outright ban on cryptocurrency activities under CBI directives (2021 and 2023), with no licensing or regulatory pathway for crypto-funded debit cards; any attempt to operate would be illegal and carry criminal enforcement risk.
Questions this verdict aims to answer
- What e-money / payment-institution license is required?
- How is the crypto-to-fiat conversion regulated?
- What KYC and AML obligations apply to cardholders?
- What partner-bank or BIN-sponsor arrangements are required?