Shafaq News – Baghdad

Iraq will phase out cash payments in all government institutions and public facilities by July 2026, marking what a senior official described as the start of a new era of financial modernization.

The financial and economic adviser to the Prime Minister, Mudhir Mohammed Saleh, told Shafaq News that Iraq’s farewell to cash represents a strategic step toward building a fully integrated digital economy that reduces corruption, strengthens transparency, and promotes financial inclusion.

He explained that the shift will simplify government disbursements, including salaries, pensions, loans, and subsidies, as well as the collection of fees and taxes, through faster and more accurate digital channels. “This will enhance liquidity and strengthen governance of the federal budget.”

Saleh further noted that the transition would encourage citizens to embrace electronic payments and bring unbanked individuals into the financial system, expanding financial inclusion while lowering the cost of cash-based transactions.

The Iraqi government had already banned cash payments in state institutions starting in July 2025, and has since launched awareness campaigns to encourage the shift away from a cash-based culture.

Rafidain Bank reported, earlier, a sharp rise in electronic payment settlements for government institutions in Q1 2025, with transactions totaling 2.65 trillion dinars (about $2 billion), a 244 percent increase from the same period in 2024.

For decades, Iraq has remained one of the world’s most cash-dependent economies, with officials estimating that over 90% of money circulates outside the banking system. Analysts link this pattern “to political turmoil, sanctions, and repeated banking scandals that eroded public trust and left much of the population reliant on cash-based transactions.”

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