Shafaq News/ Iraq’s Central Bank (CBI) has ordered a freeze on financial transactions involving TikTok agents, sparking a national debate over the app’s influence and the broader question of social media regulation.

On December 1, the CBI directed licensed banks and non-banking financial institutions to cease all incoming and outgoing transfers associated with TikTok agents in Iraq.

The directive, issued at the request of the Ministry of Communications, aims to curtail the financial operations of the app within the country. This decision will likely shrink financial gains for TikTok users by disrupting in-app purchases and virtual transactions, such as the sale of digital gifts.

The move comes amid a growing discourse on TikTok’s role in Iraqi society. Over the past year, the government has deliberated over whether to ban the app, citing concerns about its societal impact.

In a March 2024 press conference, Minister of Communications Hayam Al-Yasiri criticized the platform for contributing to “social fragmentation” and providing “little educational value.”

Despite these criticisms, TikTok remains the most popular social media platform in Iraq, boasting 31.9 million users—an increase from 23.88 million last year and surpassing Facebook, Instagram, and YouTube.

TikTok’s Monetization Mechanism

TikTok has transformed the way many Iraqis earn income. The platform’s “tipping” feature allows users to accumulate virtual gifts, which can then be converted into real money.

Users purchase TikTok Coins, a virtual currency, to buy these gifts. Once received, content creators can convert the digital rewards into cash through processes that often involve local agents or international financial services.

This ecosystem has created a burgeoning economy around TikTok in Iraq, but the CBI’s decision could disrupt these earnings. Many TikTok users rely on financial intermediaries—known as agents—to facilitate cashouts. These agents process transactions locally and internationally.

Direct Impact on Agents

Mohamed Sameer Al-Lami, a TikTok agent in Iraq, expressed concerns about the directive. “This decision affects me directly, but it doesn’t impact regular TikTok users hosting live streams,” Al-Lami told Shafaq News.

According to him, live streamers’ earnings are deposited in their personal in-app wallets, which can be withdrawn through platforms like Payoneer, MoneyGram, or bank transfers—even from outside Iraq.

Al-Lami revealed plans to shift his operations to a UAE-based bank to bypass the restrictions. “This move ensures that my earnings remain unaffected,” he said, highlighting the workaround options still available for many agents and users.

Ambiguity in the Decision

The rationale behind the central bank’s directive remains unclear, sparking speculation about its underlying motives.

Legal expert Walid Al-Shibli told Shafaq News that the decision lacks transparency. “It’s uncertain whether the move is politically motivated, a response to technical or security concerns, or part of broader geopolitical tensions,” he said.

Al-Shibli noted that TikTok’s Chinese origins might place it within the crosshairs of US-China competition, a rivalry that extends to technology and social media.

“If this decision serves another nation’s interests at Iraq’s expense, affected parties could legally challenge it under Iraqi Civil Procedure Law. However, if it’s based on national security concerns, such as addressing cybersecurity risks or preventing money laundering, it aligns with state policy.”

Broader Implications for Social Media in Iraq

Financial and banking expert Mustafa Hantoush pointed out that Iraq’s limited engagement with global social media platforms complicates effective regulation. “These companies don’t have direct branches in Iraq, so they rely on local agents who act more like general offices rather than official representatives,” Hantoush explained.

He argued that halting financial transfers to TikTok’s agents equates to a de facto ban on commercial activities tied to the app, such as advertising and promotions, which “could disrupt millions of dollars in trade facilitated by these platforms,” he warned, advocating for stricter regulation over outright bans.”

Hantoush highlighted the growing role of social media in Iraq’s digital economy, describing platforms like TikTok as “significant e-commerce hubs.” Disrupting their financial operations, he suggested, could have unintended economic consequences.

Social Impact and the Call for Balance

Beyond financial concerns, TikTok’s societal influence has drawn criticism from social researchers. Amal Al-Kabashi noted that while the platform has become a source of income for some users, it has also encouraged problematic content. “Many users resort to trivial or even unethical topics, including offensive language, to attract more followers,” she told Shafaq News.

“It’s troubling to see millions of followers gravitate toward creators who lack meaningful or educational content,” she added.

However, Al-Kabashi cautioned against blanket restrictions. “Denying access to such services could harm users who rely on the platform for legitimate income. The solution lies in regulating these activities to promote societal awareness while ensuring accountability without infringing on freedom of expression.”

The Path Forward

Iraq’s decision to halt financial transfers for TikTok agents could mark a step in the country’s efforts to regulate the influence of social media platforms. While the directive directly targets TikTok’s monetization mechanisms, its broader implications touch on questions of digital freedom, economic impact, and societal values.