Stablecoin issuer / redeemer in Iraq
Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.
Stablecoin issuer is not permitted in Iraq.
Verdict Details
- Permitted
- no
- Local entity required
- Yes
- Licensing burden
- None
- Last updated
- 2026-07-13
AML Obligations
- No AML/CTF compliance pathway exists for stablecoin issuance — the activity is prohibited outright.
- If a prohibited operator were detected, Law No. 39 of 2015 (AML/CTF law) CDD, EDD, and STR obligations would apply to any traditional financial institution handling linked transactions.
- The Iraqi AML/CFT Office (FIU) would receive and analyze STRs; CBI supervises enforcement for financial institutions.
Key Restrictions
- Stablecoin issuance, redemption, and use are banned by the Central Bank of Iraq (CBI) directives as of February 2022.
- No licensing framework exists for stablecoins — Law No. 64 of 2004 (CBI Law) and Law No. 40 of 2015 (Payment Systems) do not cover crypto assets.
- No legal entity can lawfully issue or redeem a stablecoin while domiciled or operating in Iraq.
- Foreign-issued stablecoins are also prohibited — no legal basis exists for their use locally.
Key Risks
- Criminal enforcement exposure: arrest warrants have been issued for cryptocurrency trading (Reuters, April 2022).
- No clear distinction between personal holding, trading, and issuance — all crypto activities face the same prohibition.
- Reputational and operational risk for any entity seeking to serve Iraqi residents from abroad — CBI has not signalled any legalisation pathway.
- No tax framework exists; any crypto income would be treated as illegal proceeds, attracting AML/CFT investigation.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
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.
Indirect Reference (News reporting on CBI stance): https://www.reuters.com/markets/currencies/iraq-central-bank-bans-cryptocurrency-transactions-2022-02-18/ (This article refers to a CBI circular banning crypto)
Reuters/Bloomberg/Other Financial News: Regularly report on Iraqi financial regulations, often citing direct CBI communications. For instance, news reports from February 2022 widely covered the CBI's reinforcement of its ban.
Law No. 64 of 2004 - Central Bank of Iraq Law: This law establishes the CBI as the primary monetary authority with powers to regulate the financial system, issue currency, and manage monetary policy. This overarching authority underpins the CBI's power to ban unregulated financial instruments like stablecoins.
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.
No licensing framework exists. No entity can legally issue stablecoins in Iraq.
None exist. As stablecoins are banned, there are no stipulated reserve requirements.
No official redemption rights are recognized. Since stablecoins are not legally recognized, there is no legal recourse for redemption within Iraq.
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.
Law No. 39 of 2015 – Anti-Money Laundering and Combating the Financing of Terrorism Law: This is the primary legislation. It establishes the legal framework for combating money laundering and terrorist financing across all sectors of the Iraqi financial system. It aligns with international standards set by the Financial Action Task Force (FATF).
Iraqi Anti-Money Laundering and Counter-Terrorist Financing Office (AML/CFT Office): This office functions as Iraq's Financial Intelligence Unit (FIU). It is the central national authority responsible for receiving, analyzing, and disseminating suspicious transaction reports to law enforcement agencies. It is instrumental in investigating money laundering and terrorist financing cases, including those potentially involving virtual assets acquired or used illegally.
A report by Reuters detailing the ban: https://www.reuters.com/markets/currencies/iraqi-authorities-issue-arrest-warrants-over-cryptocurrency-trading-2022-04-20/
Al-Monitor also reported on the Iraqi government's crackdown: https://www.al-monitor.com/originals/2022/05/iraq-cracks-down-crypto-trading-amid-concerns-money-laundering
No specific capital gains tax for cryptocurrency. Since cryptocurrency trading is prohibited, there are no provisions for taxing gains from such activities.
None. There is no crypto-specific tax legislation in Iraq. The regulatory stance is one of prohibition, not regulation and taxation.
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.
Stablecoin issuance is prohibited outright — no licensing framework exists, no redemption rights are recognised, and all cryptocurrency activity (including issuance, trading, and use) has been banned by the Central Bank of Iraq since February 2022, with criminal enforcement including arrest warrants.
Questions this verdict aims to answer
- What e-money or banking license is required to issue?
- What reserve composition, segregation, and audit rules apply?
- What redemption rights must be granted to holders?
- Are foreign-issued stablecoins permitted for use locally?