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Is crypto legal in Iraq? Rules & regulation (2026)

Crypto is unclear in Iraq.

The Central Bank of Iraq (CBI) explicitly prohibits all supervised financial institutions, banks, non-bank intermediaries, and electronic payment providers, from engaging with virtual assets via Circular No. 125/5/9 (2021), citing AML/CFT risks and absence of a regulatory framework. No VASP licensing regime exists, and the Kurdistan Regional Government (KRG) issued active enforcement bans on crypto and forex trading in 2025-2026, including stablecoins such as USDT. Individual possession is not explicitly criminalized by national statute, leaving private holdings in a legally ambiguous gray zone with severe practical constraints.

Last verified Official sources first · MethodologyCompare Iraq with other countries

Legal framework

Central Bank of Iraq Circular No. 125/5/9 (22 November 2021); CBI follow-up directive (26 March 2022); Anti-Money Laundering and Countering Terrorism Financing Law No. 39/2015 (Art. 36); Kurdistan Regional Government Interior Ministry Directive (2025-2026)

Status by sub-area

  • Stablecoins

    None

    No stablecoin issuance or authorization framework exists in Iraq. The KRG's 2025–2026 enforcement directive explicitly names USDT and other stablecoins as prohibited instruments, consistent with the CBI's blanket prohibition on virtual assets for supervised entities.

  • Exchanges / VASP

    None

    No exchange or VASP licensing framework exists. CBI Circular No. 125/5/9 (2021) prohibits supervised institutions from any virtual-asset dealings, and no licensing pathway for crypto exchanges or VASPs has been established or proposed.

  • Token Offerings

    None

    Iraq has no legal framework for token offerings, ICOs, or STOs. All virtual-asset activity by supervised institutions is prohibited, and no securities or capital-markets legislation addresses token classification or provides a compliant pathway for token sales.

  • Custody

    None

    No custody rules for digital assets exist in Iraq. Financial institutions are banned from holding client crypto, and there are no qualified-custodian provisions, segregation requirements, proof-of-reserves obligations, or insurance mandates applicable to crypto assets.

  • DeFi

    None

    DeFi is not specifically addressed in Iraqi law but falls within the scope of the broader institutional ban on virtual assets. No guidance on DeFi protocols, DAOs, or decentralized exchanges has been issued, and no regulatory sandbox exists.

  • Tax

    None

    Iraq has no specific cryptocurrency tax legislation. The effective prohibition on formal crypto activity means no dedicated capital-gains, income, or VAT treatment for digital assets has been enacted, and no tax reporting obligations for crypto exist. Iraq's general corporate income tax rate of 15% applies to corporate profits but no guidance addresses crypto specifically.

Key points: crypto & digital assets in Iraq

  1. CBI Institutional Ban (2021, reaffirmed 2022)

    CBI Circular No. 125/5/9 (22 November 2021) forbids all CBI-supervised institutions from transacting in virtual assets. A follow-up directive on 26 March 2022 reinforced alignment with FATF Recommendations on mitigating ML/TF risks from virtual assets.

    cbi.iq libpa.org

  2. KRG Active Enforcement (2025-2026)

    The Kurdistan Regional Government Ministry of Interior issued a directive banning all cryptocurrency and forex trading for citizens and commercial entities, explicitly naming stablecoins (USDT), and ordering office closures and judicial referrals for violators.

    kurdistan24.net en.964media.com rudaw.net

  3. No VASP Licensing Pathway

    Iraq has no dedicated cryptocurrency or VASP licensing regime. Authorities invoke Article 36 of AML/CTF Law No. 39/2015 to treat virtual-asset activities as potential money-laundering predicate offenses, with no route for licensed exchange or custodial operation.

    freemanlaw.com cryptocurrency.law

  4. Individual Possession Gray Zone

    No Iraqi statute explicitly criminalizes individual possession or peer-to-peer crypto trading, but banking channels are blocked and AML laws may be invoked against flagged transactions, creating severe practical restrictions without a clear criminal prohibition.

    freemanlaw.com libpa.org

  5. CBDC Under Early-Stage Research

    In March 2025, Iraq's Prime Ministerial financial advisor announced the CBI is researching a central bank digital currency as a sovereign digital alternative to cash. The project remains in early development with no published timeline or draft legislation.

    thenewregion.com cbdctracker.hrf.org

  6. Iraq Among ~10 Global Crypto-Ban Nations

    Multiple sources place Iraq among the small group of countries with comprehensive institutional crypto bans, with no licensing framework, active KRG enforcement, and the CBI classifying crypto as high-risk speculative instruments akin to Ponzi schemes.

    shafaq.com libpa.org

Sources

  1. cbi.iq/
  2. libpa.org/central-bank-of-iraq-crypto-restrictions-what-you-need-to-know
  3. freemanlaw.com/cryptocurrency/iraq-and-cryptocurrency/
  4. kurdistan24.net/en/story/911806/krg-interior-ministry-bans-cryptocurrency-trading-war
  5. en.964media.com/34722/
  6. rudaw.net/english/kurdistan/030520261
  7. cryptocurrency.law/analyzing-iraqs-cryptocurrency-regulation-landscape-in-2024/
  8. thenewregion.com/posts/1709/central-bank-of-iraq-moves-toward-digital-currency-to-addr
  9. cbdctracker.hrf.org/currency/iraq
  10. shafaq.com/en/Economy/Iraq-among-10-nations-banning-cryptocurrency

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Orientation, not legal advice: verify against the primary sources linked above. Last verified 24 May 2026. Methodology & how to cite · State of Technology Regulation 2026