Iraq Crypto Mining Ban Since 2017: What You Need to Know

Back in 2017, Iraq made a bold move: it banned cryptocurrency mining and trading outright. No licenses. No exceptions. Just a flat-out prohibition from the Central Bank of Iraq. Five years later, the ban is still in place-and it’s one of the strictest in the world. While countries like China shut down mining for environmental reasons and others like El Salvador embraced Bitcoin, Iraq doubled down on control, fearing chaos in its fragile economy. But here’s the twist: despite the ban, crypto is still alive in Iraq. Not in banks. Not in offices. But in hidden rooms, whispered conversations, and encrypted chats.

Why Did Iraq Ban Crypto in 2017?

The Central Bank of Iraq didn’t wake up one day and decide to outlaw Bitcoin out of nowhere. The decision came from real fear. Iraq’s financial system was-and still is-fragile. Banks struggled with corruption, cash shortages, and a lack of digital infrastructure. The bank saw cryptocurrencies as untrackable, untaxable, and uncontrollable. No central authority. No paper trail. No oversight. That’s a nightmare for any government trying to keep its economy stable.

They worried about money laundering. They worried about fraud. They worried about people losing life savings to volatile coins like OneCoin, which turned out to be a scam. In 2018, the Kurdistan Regional Government added weight to the ban by issuing a religious fatwa against digital currencies, calling them incompatible with Islamic finance principles. Suddenly, the ban wasn’t just financial-it was moral too.

And then there was the energy angle. Bitcoin mining eats electricity. A lot of it. Greenpeace USA pointed out that Iraq, already struggling with power outages, couldn’t afford to let miners drain the grid. So the Central Bank didn’t just ban trading-it banned the machines that mine crypto. No ASICs. No rigs. No running your home in Baghdad like a mini data center.

Who’s Still Mining? And How?

If you walk through Baghdad today, you won’t see crypto mining farms. But if you know where to look, you’ll find them.

Ahmed Crypto, a 33-year-old from Baghdad, used to run a small operation out of a rented office. Then came the warnings. The visits. The threats. Now he works from his bedroom, using a single miner hidden under his bed. He trades over Facebook Messenger, not apps. He doesn’t use exchanges. He meets buyers in cafes-quiet ones, far from police stations. He owns $10,000 worth of Bitcoin and Ethereum. He says the ban is "backward," but he’s not fighting it. He’s just working around it.

Others aren’t so lucky. At least two people have been arrested for crypto-related activities, according to underground sources. But here’s the odd part: no one’s been formally tried. Lawyer Hayan Al-Khayyat says he’s never seen a court case tied to crypto mining or trading. That means enforcement is random. Sometimes it’s a warning. Sometimes it’s a raid. Sometimes it’s nothing at all.

Miners use VPNs, burner phones, and cash-based peer-to-peer trades. Some even use the dark web to buy hardware. They share tips in encrypted Telegram groups. They avoid talking about mining in public. The community calls it "the whisper economy."

How the Ban Hurts Iraq’s Economy

The ban wasn’t just about stopping crypto. It was about protecting the Iraqi dinar. But the unintended consequences are biting back.

Businesses that rely on international trade are stuck. Sending money abroad? It takes weeks. Banks freeze transfers. Fees skyrocket. Some importers pay in cash, carrying suitcases of dinars to border crossings. Others use informal hawala networks-old-school money brokers who move cash without digital records.

Cryptocurrencies could’ve helped. Imagine a small business owner in Basra buying parts from Turkey. With Bitcoin, the payment clears in minutes. With Iraqi banks? It takes 10 days. And if the bank suspects anything unusual? The funds vanish. No explanation. No appeal.

Even remittances suffer. Iraqis abroad send home billions each year. Most go through Western Union or hawalas. But if they could send crypto directly to a family member’s wallet, it’d be faster, cheaper, and safer. Instead, families wait. And pay more.

Global Context: Where Does Iraq Stand?

Iraq isn’t alone. As of 2025, only about ten countries have total crypto bans. China shut down mining in 2021. Egypt banned it over religious concerns. Bangladesh criminalizes possession. Bolivia reversed its ban in 2024. Russia walks a tightrope-banning payments but allowing mining.

Iraq is one of the few places where the ban is absolute and unchanged. No pilot programs. No regulatory sandboxes. No discussions with tech experts. The Central Bank still issues public warnings every few months. Their message hasn’t changed: "Digital currencies are dangerous. Don’t touch them."

But while China crushed its mining industry with force, Iraq’s ban is more like a ghost. The rules exist on paper. But underground, the machines keep running.

Could Iraq Change Its Mind?

Some in Iraq’s crypto community think change is coming. Not soon. But eventually.

Ashur Al-Nuaimi, another miner, says the bank doesn’t understand blockchain. They see Bitcoin as gambling. But it’s not. It’s a ledger. A system. A tool. If they understood that, he argues, they’d see how it could help tax collection, reduce fraud, and bring in new revenue.

Imagine this: Iraq legalizes crypto mining under strict rules. Miners pay a small license fee. They use renewable energy-solar panels on rooftops. The government takes a cut of every transaction. Suddenly, the underground economy becomes a tax base. The electricity crisis? Miners pay for their own power. The banks? They get a new stream of income.

But right now? No one’s talking about it. The Central Bank hasn’t signaled any shift. No officials have suggested reform. The ban stays. And the miners? They keep whispering.

What This Means for You

If you’re in Iraq and you’re thinking about crypto: know the risks. You can’t use banks. You can’t use exchanges. You’re on your own. One wrong move could mean trouble.

If you’re outside Iraq and you’re curious: understand that this isn’t just about technology. It’s about control. About fear. About a country trying to hold onto stability in a world that’s moving too fast.

Crypto isn’t gone in Iraq. It’s just hiding. And as long as people need faster, cheaper ways to move money, it’ll keep finding ways to survive.