Baghdad: The financial advisor to the Prime Minister, Mazhar Muhammad Salih, has announced significant steps by the Central Bank towards introducing a digital currency, which is intended to serve as a gradual alternative to the existing paper currency. This move is expected to bring about a transformative change in the national payments system and enhance financial transparency.

According to National Iraqi News Agency, Salih highlighted several benefits that the issuance of a digital currency would bring. Among these are the reduction of cash leakage and printing costs, alongside limiting the circulation of paper currency outside the formal banking system. Additionally, the shift to digital currency is anticipated to decrease the need for repeated money printing, thereby lowering the associated production and distribution expenses. It will also enhance transparency and control over financial flows, enabling better tracking of digital liquidity and spending patterns, whether they pertain to consumer behavior, savings, or investment. This transition is poised to improve oversight of capital movements and foreign transfers, supporting ongoing efforts to combat money laundering.

Salih further pointed out that digital currencies have the potential to achieve greater financial inclusion, particularly for segments of the population that are less integrated into the banking system. This would foster enhanced economic and social integration.

He also emphasized the need for a robust technical infrastructure to facilitate the transition to digital currency. This includes reliable and advanced Internet networks, sophisticated cybersecurity systems to safeguard data and transactions, and fostering societal acceptance of digital currencies. This acceptance should start with government agencies utilizing digital currency in collection operations and official transactions.

The advisor reiterated that digital cash would retain its traditional roles as a unit of account, a medium for payments, and a store of value, with the added advantage of being usable over the Internet and on smartphones. This development is expected to contribute to a more stable and efficient financial environment.