Iraq is a country plagued by political and economic instability for decades and is currently facing a wave of protests against corruption, poor public services and foreign interference. In this context, some activists and entrepreneurs are looking for ways to leverage blockchain technology as a tool for social change and innovation.
Blockchain is a distributed ledger system that records transactions in a secure, transparent and immutable way, without the need for intermediaries or central authorities. Blockchain can enable various applications, such as cryptocurrencies, smart contracts, digital identity, supply chain management and more.
However, blockchain adoption in Iraq faces many challenges both technical and legal. On the technical side, Iraq suffers from frequent power outages, low internet penetration and poor infrastructure, which limit the access and usability of blockchain platforms. On the legal side, Iraq lacks a clear and comprehensive regulatory framework for blockchain and cryptocurrencies, which creates uncertainty and risk for users and developers.
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According to a report by Deloitte, Iraq is one of the countries with the lowest level of blockchain readiness in the Middle East, due to its weak institutions, low innovation capacity and high political risk. The report also states that “instead of pushing cryptocurrencies to the periphery of financial systems, central banks and other regulators should embrace them and work to develop an appropriate regulatory environment that minimizes risks and maximizes opportunities”.
According to the World Bank, Iraq’s GDP per capita was $4,452 in 2020, ranking 133rd out of 190 countries. Iraq also suffers from a lack of financial inclusion, as only 23% of adults have an account at a financial institution or with a mobile money provider. Adoption and regulation of blockchain in Iraq is still in its infancy.
There is no specific legislation or authority governing the use of blockchain or cryptocurrencies in Iraq. The Central Bank of Iraq (CBI) has not issued any official statement or guidance on the legal status or treatment of cryptocurrencies. The CBI has only warned the public about the risks and challenges associated with cryptocurrencies, such as volatility, fraud, money laundering and terrorist financing.
Some initiatives have been launched to promote blockchain awareness and education in Iraq, such as the Iraqi Blockchain Society, which organizes events, workshops and hackathons to introduce blockchain concepts and use cases to the public. Also, some blockchain projects have emerged in Iraq, such as ZainCash, a mobile wallet that allows users to send and receive money using blockchain technology, and Taqanu, a digital identity platform that aims to provide banking and other services to refugees and displaced persons using blockchain.
However, these efforts are still limited and face many obstacles, such as censorship, hacking and violence. For example, during the 2019 and 2020 protests, some activists used blockchain platforms such as Ethereum and Steemit to document human rights violations and share information with the international community. However, they also faced cyber attacks from pro-government forces, who allegedly used Iranian expertise to infiltrate and disrupt their online activities.
Therefore, it is clear that blockchain technology has great potential to improve the social and economic conditions in Iraq, but it also needs a supportive and favorable environment to flourish. This requires more collaboration and dialogue between government, civil society, the private sector and international partners, to develop a legal framework that recognizes and regulates blockchain technology in a fair and transparent manner. It also requires more investment and innovation in infrastructure, education and security, to ensure that blockchain platforms are accessible, reliable and safe for all users.
Therefore, Iraq needs to develop clear and comprehensive blockchain legislation that can address these challenges and risks, while promoting the development and adoption of this technology. Such legislation should:
Define legal status and classification of blockchain and digital assets.
Establish the rights and obligations of blockchain users, providers and regulators.
Provide guidelines and standards for blockchain security, privacy and compliance.
Create incentives and support mechanisms for blockchain innovation and education.
By doing so, Iraq can harness the potential of blockchain to improve its economic, social and political conditions, and become a regional leader in this new technology.
