Economy Update – Baghdad
The Governor of the Central Bank of Iraq, Ali Al-Alaq, has announced a significant transition towards smart banking platforms incorporating artificial intelligence. This marks a pivotal step in Iraq’s comprehensive digital transformation within its financial sector.
In a recent statement, Al-Alaq emphasized that, despite previous challenges in enhancing electronic payment systems—recognized as a crucial phase in digital transformation—the transition to improved digital tools is imminent. He noted that innovations in electronic payment methodologies are rapidly evolving.
Al-Alaq outlined a future where banking operations will undergo substantial changes, including an individualized financial digital identity for citizens. This identity will facilitate a range of operations related to personal accounts, asset management, and investment opportunities both domestically and internationally. He highlighted that banks will evolve into intelligent platforms managing financial transactions while leveraging advanced technologies and artificial intelligence.
Additionally, Al-Alaq mentioned that the Central Bank, in alignment with global trends, is exploring the introduction of a digital currency regulated by the institution itself—not to be confused with cryptocurrencies that exist outside central banking frameworks. This initiative is being coordinated with international and Arab financial organizations, including direct collaboration with the Arab Monetary Fund.
He expressed confidence that these developments will not only address significant economic, financial, and social challenges but also establish a robust framework for monitoring funds, thereby curtailing corruption, money laundering, and terrorist financing. All financial transactions will occur within a transparent system designed for effective oversight while allowing users the ease of conducting transactions globally.
Al-Alaq reiterated that the younger population is expected to reap the benefits of these advancements. Many youths are already leveraging digital portfolios to invest in diverse avenues beyond Iraq. However, he cautioned them to remain vigilant against potential fraud, underlining the institution’s commitment to protect citizens from becoming victims.
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