Iraq Crypto Mining Ban Since 2017: What Happened and Why It Still Stands

Back in 2017, Iraq made a bold move - it banned cryptocurrency mining and trading entirely. No exceptions. No gray areas. Just a flat-out prohibition from the Central Bank of Iraq the national monetary authority that regulates financial institutions and currency in Iraq. Since then, owning Bitcoin, Ethereum, or any other digital coin isn’t just risky - it’s illegal. And yet, people still do it. Quietly. In basements. In cafes. Behind locked doors.

Why Did Iraq Ban Crypto in the First Place?

The Central Bank of Iraq didn’t wake up one day and decide to outlaw Bitcoin because they disliked the technology. They had real concerns. The country’s economy was fragile. Banking infrastructure was outdated. And digital currencies, with their anonymous, decentralized nature, looked like a perfect tool for money laundering, tax evasion, and financial chaos.

Their official statement in 2017 warned that cryptocurrencies were unregulated, untraceable, and untaxable. They feared that if people started using digital coins instead of the Iraqi dinar, it could destabilize the entire financial system. The bank also pointed to the high energy use of Bitcoin mining - something even global environmental groups like Greenpeace USA noted at the time. Iraq, already struggling with power shortages, didn’t need thousands of mining rigs sucking up electricity meant for homes and hospitals.

The ban wasn’t just about money. It was about control. In a country where government institutions are still rebuilding after decades of conflict, allowing an unregulated financial system to grow was seen as too dangerous. So they shut it down - hard.

Who’s Still Mining Crypto in Iraq Today?

Here’s the twist: the ban never worked.

Despite the legal risk, crypto mining and trading never disappeared. They just went underground. In Baghdad, you’ll find people like Ahmed Crypto - a 33-year-old who still holds $10,000 worth of digital assets. He used to run his operation from an office. Now he manages trades through a private Facebook page. He’s careful. He doesn’t talk about it in public. He knows what happens if he’s caught.

There are stories of at least two arrests linked to crypto activities, according to whispers in the local community. But legal experts like lawyer Hayan Al-Khayyat say they’ve never seen a formal trial for crypto trading. That gap between law and enforcement is huge. It means the ban is more of a threat than a rule.

Miners and traders meet in quiet corners of cafes, speaking in hushed tones. Some use burner phones. Others route transactions through friends abroad. They’ve built an entire shadow economy - one that doesn’t show up on any government ledger.

How Does the Ban Affect Everyday Iraqis?

The ban doesn’t just hurt miners. It hurts everyone.

Iraqis who want to send money to family overseas face long delays. Traditional banks are slow. Fees are high. And because crypto is banned, there’s no fast, cheap alternative like Bitcoin or USDT. Businesses that deal with international suppliers struggle. Payments get frozen. Contracts fall through. Some companies have had to close because they couldn’t get paid.

The Anti-Money Laundering rules in Iraq are strict - so strict that even legitimate cross-border transfers get stuck in layers of paperwork. Meanwhile, countries like the U.S., Germany, and even Nigeria have found ways to regulate crypto without banning it. Iraq hasn’t.

There’s also a generational divide. Young Iraqis, many of whom grew up online, see crypto as freedom - a way to bypass broken systems. Older officials, who remember hyperinflation and currency collapses, see it as a threat. That tension isn’t going away.

How Does Iraq Compare to Other Countries?

Iraq isn’t alone. In 2025, only about ten countries have full crypto bans. China shut down mining in 2021. Egypt banned it for religious and economic reasons. Bangladesh criminalized possession. Russia has a patchwork of restrictions. And Bolivia? They lifted their ban in 2024.

But Iraq’s ban is different. It’s not just about energy or religion. It’s about control. While China used force - shutting down data centers and cutting power - Iraq relies on fear. No raids. No crackdowns. Just silence and warnings.

And unlike China, Iraq doesn’t have the tech infrastructure to monitor crypto effectively. That’s why enforcement is patchy. The government doesn’t know who’s mining. They don’t have the tools to track wallets. So they just say it’s illegal and hope people listen.

Why Won’t Iraq Change Its Mind?

The Central Bank of Iraq hasn’t signaled any shift. No public reviews. No pilot programs. No discussions with blockchain experts. The stance remains: crypto is dangerous. Period.

Some inside the crypto community argue that’s a mistake. If the government regulated mining - requiring licenses, taxing profits, and monitoring energy use - they could turn a threat into a revenue stream. Instead, they’re losing out on taxes, tech jobs, and international trust.

Ashur Al-Nuaimi, another Iraqi crypto user, says the bank’s leadership simply doesn’t understand blockchain. "They see Bitcoin as magic money," he says. "They don’t know it’s a ledger. They don’t know it can be tracked. They’re scared of what they don’t understand." That fear is holding Iraq back. While other nations are building crypto-friendly policies, Iraq is digging in.

What’s the Future for Crypto in Iraq?

The ban isn’t going to last forever - but not because the government will change its mind. It’ll change because people won’t stop.

Technology doesn’t care about borders. If you can access the internet, you can access Bitcoin. And in Iraq, internet access is growing. Mobile data is cheap. Young people are tech-savvy. They’ll find ways around the ban - just like they did with social media during the internet shutdowns.

The real question isn’t whether crypto will survive in Iraq. It’s whether the government will realize that banning it isn’t protecting the economy - it’s isolating it.

Right now, Iraq is stuck between two worlds. One where money is controlled, slow, and centralized. And another where money is fast, global, and user-owned. The ban tries to force everyone into the first world. But the second world is already here. And it’s not going away.