IRAQ: CRYPTO’S PROMISE AND PERIL IN A LAND OF FINANCIAL CHAOS
In a country ravaged by war and economic instability, Iraq is embracing cryptocurrency with reckless abandon. But as Abdurrahman Bapir, founder of Kurdcoin, the first and largest crypto brokerage in Iraq, warns, this surge in adoption has brought not only benefits but also significant risks.
The Promise of Cryptocurrency
Cryptocurrency offers a lifeline to the unbanked and underbanked population in Iraq. According to Bapir, “cryptocurrency presents an opportunity for people who have no access to traditional financial services.” With a population of over 40 million, mostly under the age of 25, and widespread internet penetration, Iraq presents a largely untapped market for crypto services.
The Peril of Cryptocurrency
However, this surge in adoption has also created opportunities for fraud and scams. “The lack of regulatory oversight has led to a black market for crypto,” warns Bapir. Foreign agents and companies are posing as legitimate businesses to steal millions from unsuspecting investors.
Recent Examples of Fraud
One recent example is Praetorian Group International (PGI), which disappeared with over $40 million in investor funds. “The only way to break this cycle of fraud and regulatory failure is through the introduction of a coherent regulatory framework for digital currencies,” believes Bapir.
The Challenges Ahead
Despite these challenges, cryptocurrency use in Iraq continues to grow at an exponential rate. However, there are several major obstacles that need to be addressed:
- Lack of Regulatory Oversight: The Iraqi Central Bank has banned the use of cryptocurrencies, and the Ministry of Interior has threatened legal action against businesses that facilitate their trade.
- Financial Illiteracy: Many people making uninformed investment decisions and falling prey to scams due to a lack of knowledge about cryptocurrencies and blockchain technology among both government officials and the general public.
The Future of Cryptocurrency in Iraq
Despite these challenges, cryptocurrency use in Iraq is expected to continue growing. Major exchanges like Binance, Crypto.com, and Coinbase do not provide services in Iraq, but local businesses are beginning to use cryptocurrency for transactions within the country and abroad. Companies and wealthy individuals are also adding crypto to their investment portfolios, despite the warnings from authorities.
As Bapir notes, “Mass crypto adoption in Iraq seems inevitable because of the financial opportunities and ease of use. It is happening fast.”