Iraq has signaled an intention to join the race for one Central Bank digital currency (CBDC), starts with a series of experiments aimed at improving its payment ecosystem.
The digital dinar will complement existing Payment options while working in the same way as cash. Iraqi Prime Minister Muzhir Mohammad Saleh’s financial adviser confirmed the government’s plan to launch a retail CBDC for the country.
Saleh said the central bank in Iraq (CBI) will spearhead The design of the digital dinner with the intention of utilizing a number of economic benefits. While the technical details of the launch are unclear at the moment, Saleh says that the benefits of digital Dinar will be extensive.
To begin with, the digital dinner Reduce cash dependency While lowering print costs and ensuring that money circulates within the banking system. Through this initiative, Iraq is trying to improve financial efficiency while the central bank provides increased control over the financial system.
The issuance of CBDC “improves openness, control over financial flows and the ability to track digital liquidity and spending patterns, whether for consumption, savings or investments,” Saleh said.
A key point in Saleh’s theory is the potential for effective capital transfers while managing the plague of money laundering.
Saleh tried Allay Fear about a CBDC launchNote that users’ privacy is guaranteed under the system. Saleh did not reveal the exact protections for privacy protection, but Pundits says that CBI will follow its comrades in the design of a CBDC.
There is a need for “strong technical infrastructure, including reliable and advanced internet networks, and advanced cybersecurity systems to protect data and transactions,” Saleh said.
While having the same functionalities as cash, the incoming CBDC will offer Digital payment Features designed to improve Iraq’s financial ecosystems.
Out of domestic payments there are suggestions that the digital dinner will be retrofitted with cross -border payment functions. Experts tip the integration of Offline payment functionality into CBDC to increase financial inclusion levels for the Middle East.
Its neighbors, Iran and JordanHas taken the lead in the CBDC development in the region and loses against a commercial roll -out. Iran’s CBDC is expected to help the country avoid international sanctions such as that Strengthens the bands with Russia.
Israel is moving forward with CBDC experiments
Elsewhere, the Bank of Israel (Boi) published the preliminary design for the proposed digital Sikelen after tipping with the concept of a CBDC 2017.
According to a press releaseThe document follows the completion of a high -level design for the digital Sikelen at the end of 2024. In addition to the publication, a call for public feedback is when CBDC approaches the next step.
A clever look at the document reveals several important information about the design of digital Sikel, from its architecture to proposed policy recommendations.
Boi says the digital Sikel will be open to the public, with full access to tourists, children and companies. While Basic use cases For individuals is free, companies that use CBDC will incur costs, which the central bank says will be “significantly lower than existing digital payments.”
The document confirms the integration of offline payment functionality for digital Sikelen and supports transactions without internet connection. However, the essay clarifies that CBDC will not continue with Programability functions But fail to give clear reasons for the decision.
Another benefit associated with the digital shekel is that it is intended to be a “universal means of payment” similar to cash. Users will have an additional convenience with digital payments, but privacy rights remain a concern.
The bank controller revealed that the digital shekel would support completely anonymous payments for transactions under a certain threshold. Because Allay Fear confirms the essay that users’ personal information will not be available to the central bank but will be held by payment services suppliers.
For the business, the Central Bank sees a two -layer model that calls in the private sector as digital SHEKEL suppliers to interact with end users. These units do not have customers’ funds and are protected from the financial risk resulting from financial mediation.
Despite this development, Boi managers are still uncertain about the economic vitality of a retail CBDC after completing several Studies. In the midst of this uncertainty forces the bank forward with experiment To keep up with other central banks that damage against a commercial roll -out of CBDCs.
“The Bank of Israel has not yet decided whether to issue a digital Sikel, but it is important for us to prepare and deepen knowledge and understanding together with the ecosystem regarding each of the possible components of the digital sewing system,” said Yoav Sofer, digital shekel project.
A cross -section of Israelis is previous The release of a digital Sikel, with reference to a positive competition between it and offers from traditional financial institutions.
Watch: CBDCs are more than just digital money
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