Home › Crypto Regulation › Iraq

Quick answer — Iraq, 2026

• Legal: Banned for banks and payment firms, individual owning in grey area
• Tax: No dedicated crypto tax regime, general taxes may apply
• Buying: No legal domestic route, informal P2P and foreign platforms only

Iraq is one of the most restrictive jurisdictions in the world for cryptocurrency. The Central Bank of Iraq (CBI) warned against dealing in digital, encrypted and virtual currencies on 14 November 2021, stating that it does not guarantee them, gives no legal protection to those who deal in them and has licensed none of them. It then issued Circular No. 125/5/9 of 29 March 2022, announced publicly on 30 March 2022, which prohibits the use of payment cards and electronic wallets for speculation and trading in digital currencies of all kinds. The CBI reaffirmed that circular on 6 February 2023, requiring all licensed banks, all licensed non-bank financial institutions and all electronic payment companies to take the administrative, legal and technical measures needed to prevent and trace such transactions and to warn their customers, with legal action under Anti-Money Laundering and Counter Terrorist Financing Law No. 39 of 2015 in the event of non-compliance. The CBI also aligned its position with Financial Action Task Force (FATF) recommendations dated 26 March 2022 that aligned its position with Financial Action Task Force (FATF) recommendations on money-laundering and terrorist-financing risks. As a result, there is no legal on-ramp through the regulated banking system, and Iraq is regularly listed among the small group of countries maintaining a broad ban on crypto transactions.

Despite this, peer-to-peer (P2P) activity persists, driven by a young, connected population, periodic dinar instability and a large diaspora that moves money across borders. This page explains Iraq's current legal status, who regulates financial activity, and how licensing, tax, AML rules, everyday use, mining and recent developments stand as of 2026. This article is general information as of 2026 and is not legal, tax or financial advice; anyone in Iraq should verify the current position with the named official regulator, the Central Bank of Iraq, and a qualified local lawyer before acting. For wider context see our guide to crypto regulation and the country regulation index.

Next: Buying safely without a local exchange · Why some states ban crypto
Nearby: Bahrain · Iran · Israel · Jordan
All countries: browse the 205 country guides

On this page: Legal status · Who regulates it · Taxes · How to buy · Mining

Crypto in Iraq sits in a legal grey area that tilts heavily towards prohibition. The Central Bank of Iraq has banned licensed financial institutions, meaning banks, money-transfer firms and electronic-payment providers, from handling cryptocurrency. That ban is the backbone of Iraq's stance: you cannot legally buy, sell or settle crypto through a regulated Iraqi bank, card or payment service. Reporting in 2025 and 2026 places Iraq among roughly ten countries that maintain a broad ban on crypto transactions.

The position of an ordinary individual is less clear-cut. There is no single statute that explicitly criminalises simply owning Bitcoin, so individual possession and informal P2P trading occupy an unregulated, ambiguous space rather than being a clearly defined crime. In practice, the absence of a clear permission is not a green light: because formal channels are closed, anyone transacting risks scrutiny under the country's anti-money-laundering framework if funds are traced back into the banking system. Enforcement has intensified in the Kurdistan Region, where authorities moved in 2025 to ban and shut down crypto and forex businesses. Treat crypto in Iraq as unsanctioned, increasingly policed in some areas, and legally risky, and verify the latest position before assuming anything.

The primary authority is the Central Bank of Iraq (CBI), which supervises banks and payment institutions and has issued the directives forbidding them from dealing in virtual assets. The CBI does not license or authorise crypto exchanges, custodians or any other virtual-asset service providers. Its official website is the first place to verify the current rules.

Several other bodies shape the picture:

• Iraqi AML/CFT authorities, operating under the Anti-Money Laundering and Counter-Terrorism Financing Law No. 39 of 2015 and the associated Anti-Money Laundering and Countering the Financing of Terrorism Office, apply to suspicious flows. Crypto activity that surfaces through banks can attract investigation.
• Kurdistan Regional Government (KRG): in the semi-autonomous north, the KRG Interior Ministry and Erbil's Asayish (security) and General Security directorates separately announced bans on cryptocurrency and forex trading in 2025, reinforcing the federal stance with on-the-ground enforcement.

Because there is no authorisation regime, there are no legally licensed crypto businesses in Iraq and no formal investor-protection or dispute-resolution mechanism for crypto users. Confirm the current status through official channels rather than relying on secondary summaries.

Iraq does not have a modern, purpose-built crypto statute with licensing, disclosure and consumer-protection rules. Instead, digital assets are governed by central-bank prohibitions layered on top of the country's general banking and anti-money-laundering controls.

The main building blocks are:

• CBI Circular No. 125/5/9 (29 March 2022): prohibits the use of payment cards and electronic wallets for speculation and trading in digital currencies of all kinds, binding licensed banks, licensed non-bank financial institutions and electronic payment companies. Reaffirmed by the CBI on 6 February 2023.
• CBI follow-up directive (26 March 2022): reaffirmed the prohibition and aligned the CBI's position with FATF recommendations on the money-laundering and terrorist-financing risks of virtual assets.
• Anti-Money Laundering and Counter-Terrorism Financing Law No. 39 of 2015: the country's core AML/CFT framework, under which dealings in virtual assets outside sanctioned channels can be treated as exposing participants to money-laundering and terrorist-financing risk.

There is no equivalent of a dedicated EU-style framework such as MiCA in Iraq, and no licensed virtual-asset service providers (VASPs). That gap is now something the government has formally committed to close: the action plan Iraq agreed with the FATF, published by the Central Bank on 19 June 2026, requires it to establish a legislative framework for virtual asset service providers, and the Central Bank convened a National Higher Committee for Regulating Virtual Assets on 14 December 2025 to design one. No draft text and no deadline have been published. Rules and enforcement can change with limited public notice, so confirm the current text of any directive through the CBI and official legal sources rather than relying on this summary alone.

There is no licensing or registration regime for crypto exchanges or virtual-asset service providers in Iraq. The CBI does not authorise crypto trading platforms, custodians, brokers or wallet providers, and the prohibition on financial institutions dealing in virtual assets means there is no compliant route for a domestic exchange to operate, settle or fund customer accounts through Iraqi banks.

In the Kurdistan Region, authorities have gone further than passive non-licensing: in 2025 the Erbil security directorates stated that digital currencies and forex platforms, including stablecoins such as Tether (USDT), are not licensed to operate in the region and are explicitly banned, and a KRG Interior Ministry committee was formed to enforce the closure of crypto and foreign-exchange companies. Authorities also reported arrests connected to forex and crypto fraud.

The practical consequence is that any platform marketing itself as a licensed Iraqi crypto exchange should be treated with extreme caution, because no such licence exists. International platforms accessed remotely operate outside the Iraqi authorisation regime and may restrict or freeze accounts linked to Iraq.

Because crypto is restricted rather than formally regulated, Iraq does not publish a clear, dedicated tax regime for cryptocurrency gains, trading or mining. There is no official guidance that assigns specific capital-gains, income or sales-tax treatment to digital assets in the way some countries have done.

That absence should not be read as tax-free. Iraq operates general income and business taxes, and in principle any income or business activity could fall within their scope regardless of the asset involved. But there is no verified, crypto-specific rate, allowance or threshold to cite, and for most people the more immediate exposure is legal rather than fiscal, because funds moving outside sanctioned channels can attract AML scrutiny.

There is no crypto-specific rate in Iraq, so the general rules are what a disposal would be measured against. Iraq taxes individual income progressively at 3 percent up to IQD 250,000, 5 percent from 250,000 to 500,000, 10 percent from 500,000 to 1,000,000 and 15 percent above 1,000,000, and companies at 15 percent, rising to 35 percent for foreign oil and gas companies. Capital gains on sales of depreciable assets are taxed at the normal corporate rate, while gains on shares and bonds sold outside a trading activity may be exempted. Crypto fits none of those categories in any published Iraqi text, and the General Commission of Taxes has issued no guidance on it. If your situation involves Iraqi tax residency or income, do not assume any particular treatment; get advice from a qualified Iraqi tax professional and confirm against the latest official rules. For general background see our guide to crypto taxes. This section is informational only and is not tax advice.

Anti-money-laundering and know-your-customer obligations are central to why Iraq restricts crypto. Under the Anti-Money Laundering and Counter-Terrorism Financing Law No. 39 of 2015, financial institutions must carry out customer due diligence, identify and verify customers, and report suspicious activity. The CBI has justified its prohibition on virtual assets by pointing to the money-laundering and terrorist-financing risks the FATF associates with crypto and the absence of a robust framework to supervise virtual-asset service providers.

For individuals, the key implication is that there is no compliant, KYC-checked domestic crypto platform to use. When crypto-related funds touch the regulated banking system, for example when someone tries to cash out, banks are required to apply AML controls and report suspicious transactions, which is how informal crypto activity can come to the attention of authorities. The KRG bans in 2025 were explicitly framed around fraud, the lack of a legal framework and the absence of protection for participants.

In short, Iraq applies AML/KYC duties to its regulated financial sector, and those duties are part of the reason crypto is pushed outside formal channels rather than supervised within them.

There is no legal route to buy crypto through a licensed domestic exchange in Iraq, and you cannot use Iraqi bank accounts, cards or payment apps to fund crypto purchases without running into the central bank's prohibition on financial institutions dealing in virtual assets. The regulated on-ramps common elsewhere, such as bank transfers to a licensed platform, card purchases and local exchanges, are not available in a compliant form.

What persists instead is informal and unauthorised: private peer-to-peer deals, cash trades and the use of foreign platforms accessed remotely. Each carries layered risks:

• Legal and AML risk: transactions outside sanctioned channels are not authorised and can be flagged.
• Counterparty risk: P2P trades offer no recourse if the other party defrauds you, and there is no regulator to complain to. Iraq has already seen sizeable crypto and forex fraud cases.
• Access risk: international platforms may restrict users connecting from Iraq, and account freezes can strand funds.

Using crypto to settle everyday purchases is equally unsupported, because no merchant acquirer or payment provider can legally process it. Articles describing growing interest in dinar-to-Bitcoin trading are describing informal demand, not a regulated market. We are not recommending any method of buying or using crypto in Iraq; the realistic picture is that it is neither sanctioned nor safe through formal means.

Bitcoin mining is not a sanctioned activity in Iraq and falls under the same restrictive stance that covers trading. Reporting indicates the CBI has effectively banned crypto mining, citing financial risk, the lack of regulatory control and energy consumption. Templated articles that highlight Iraq's cheap or subsidised energy as a mining opportunity ignore both the legal status and the practical constraints.

Several barriers reinforce the legal one:

• Electricity reliability: Iraq's grid suffers chronic shortages and load-shedding, especially in summer. Inconsistent supply undermines the uptime that profitable mining requires, and diverting subsidised power to mining is politically and legally sensitive.
• Regulatory exposure: with no licensing pathway, a mining operation has no legal footing, and visible energy use can draw the attention of authorities.
• Hardware and capital: importing and financing equipment is harder under banking restrictions.

In the Kurdistan Region in particular, authorities have moved against crypto businesses, raising the risk for any visible operation. Claims that Iraq could become a regional mining hub describe a hypothetical, not a present-day lawful industry. Until the legal stance changes and a proper framework exists, mining should be regarded as both unauthorised and impractical. This is not a recommendation to mine.

The most significant recent moves are not a loosening of the crypto ban but two parallel trends. First, enforcement has tightened, especially in the Kurdistan Region: during 2025 the KRG Interior Ministry and Erbil's security directorates announced bans on cryptocurrency and forex trading, named platforms such as Tether (USDT) as unlicensed and prohibited, formed a committee to close crypto and forex companies, and reported fraud-related arrests.

Second, the CBI is pursuing a state-controlled alternative to private crypto. In February 2025 the CBI governor announced that the central bank is developing a central bank digital currency, often described as a digital dinar, intended to gradually replace cash, reduce printing costs, improve oversight of financial flows and support anti-money-laundering efforts. In a December 2025 update on its banking-sector reform programme, CBI governor Ali Al-Allaq described the digital dinar as still under implementation and needing time and infrastructure before launch, so as of 2026 the digital dinar has still not launched. The clearest official statement located is governor Ali Mohsen Al-Alak's remark in December 2025 that the digital dinar project is under implementation but requires time and robust infrastructure before launch. A CBDC is a state liability and is not the same as decentralised cryptocurrency, so its development does not legalise private crypto and in some respects reflects the authorities' preference for a controlled digital system over open virtual assets.

Third, the CBI's wider drive to clean up financial flows has squeezed the informal channels crypto tends to rely on. Through 2024 and 2025 the central bank, working with the US Treasury, barred a number of Iraqi banks from US dollar transactions over money-laundering and dollar-smuggling concerns, and it has pushed a formal banking-reform programme that all Iraqi banks signed, including a move towards a minimum paid-up capital of 400 billion Iraqi dinars, phased in at 50 billion dinars a year with the deadline extended to the end of 2027 after pressure from private banks. The CBI has also reported rising use of digital payments, with e-wallets and ATMs helping lift financial inclusion. None of this legalises private crypto; the direction of travel is towards tighter, state-supervised digital finance rather than open virtual assets.

Because this area is fast-moving and unevenly documented in English, treat any specific claim as provisional and confirm it against the official sources below.

The defining features of Iraq's crypto landscape are restriction, uneven enforcement and a lack of consumer protection. There is no local regulator overseeing crypto platforms, no deposit insurance, and no formal dispute-resolution or complaints process if a platform fails or a counterparty defrauds you. Authorities in the Kurdistan Region explicitly cited public losses, fraud and the absence of any legal framework when banning crypto and forex trading in 2025.

The main risks for residents include:

• Legal and AML exposure: formal channels are closed and transactions can be flagged or investigated.
• Fraud and counterparty loss: informal P2P deals and unlicensed platforms offer no recourse, and Iraq has seen multimillion-dollar fraud cases.
• Volatility and liquidity risk: prices can swing sharply, and converting back to usable dinars or dollars depends on informal channels that can be disrupted or shut down.
• Custody risk: self-custody mistakes such as lost keys or phishing are irreversible.

Because there is no official safety net, the practical conclusion is caution. Do not treat any single article, including this one, as the final word, and seek qualified local advice before considering any action.

Crypto rules in Iraq are evolving and are poorly documented in English, so always confirm the current position directly with official sources rather than relying on secondary summaries. The most authoritative starting points are:

• Central Bank of Iraq (CBI), the primary financial regulator, which issued the directives prohibiting financial institutions from dealing in virtual assets and is developing the proposed digital dinar.
• Iraq Anti-Money Laundering and Countering the Financing of Terrorism Office, for the AML/CFT framework under Law No. 39 of 2015 that underpins the restrictions, including the published AML/CFT Law of Iraq.
• Kurdistan24 report on the KRG Interior Ministry ban, documenting the 2025 enforcement action in the Kurdistan Region, which the KRG Ministry of Interior restated on 3 May 2026 when it again warned that foreign exchange and digital currency trading is unauthorised and that businesses offering it face closure and legal accountability.

For broader context, see our crypto regulation guide and country regulation index. This page is general information as of 2026 and is not legal, tax or financial advice; verify the current rules with the Central Bank of Iraq and a qualified Iraqi professional before acting.

Facts reviewed: 13 August 2026. Page updated: 13 August 2026.

More countries in the region

• Crypto regulation in United Arab Emirates
• Crypto regulation in Yemen
• Crypto regulation in Kuwait
• Crypto regulation in Lebanon
• Browse all 205 country guides

Practical guides

• How crypto is taxed
• Setting up a hardware wallet
• Why exchange custody is risky