Kurdistan Blocks Digital Currency to Curb Illicit Flows

The Kurdistan Regional Government’s Ministry of Transport and Communications has ordered internet service providers to block digital-currency and electronic foreign-exchange trading platforms. The move aims to bring the region’s financial sector under Central Bank of Iraq rules and curb illicit dollar flows. The directive calls for immediate implementation and bears the signature of Minister of Transport and Communications Anno Jawhar.

Blocking Unregulated Trading

The directive addresses all internet service providers in the Kurdistan Region, asking them to block platforms that handle electronic exchange and digital-currency trading. It prohibits digital-currency transactions and electronic foreign-exchange trading, known as forex. The ministry says the measure applies the Central Bank of Iraq’s regulatory framework to the region’s digital financial sector.

The government described the ban as part of a broader Iraqi and Kurdish effort to reduce illicit currency movement and speculation. It also aims to shut a channel through which currency could move outside the formally regulated banking system. Internet providers will carry out the order by restricting access to the covered trading platforms.

A Wider Government Crackdown

The latest directive follows a September 2026 decision by the Presidency of the Council of Ministers Diwan to prevent forex-company operations in the region. On October 9, 2026, the Diwan formally told the Interior Ministry to immediately close electronic exchange companies and offices operating in the Kurdistan Region.

The instruction also reiterated a complete ban on digital-currency transactions to prevent illegal currency trading. The ministry’s order extends the regulatory effort to online platforms, while the Diwan targeted exchange companies and offices. Together, the actions address electronic trading and physical business operations.

The Diwan issued its October 9 instruction 11 days before the date of this report. The September decision came earlier as part of the same effort to prevent forex-company operations. KRG and Iraqi authorities say these measures are intended to align financial activity in the Kurdistan Region with Central Bank of Iraq rules.

Dollar Controls and Iran Sanctions

Kurdistan 24 previously reported that the US Treasury had imposed sanctions on Iraq’s International Development Bank for facilitating Iranian access to US dollars. The outlet also reported that the Central Bank of Iraq had sanctioned more than 14 Iraqi banks in coordination with Washington to prevent dollar transfers to sanctioned parties.

Those sanctions and bank actions provide financial context for coverage of the KRG measure. The directive itself focuses on digital-currency transactions, forex trading and access to electronic exchange platforms. It doesn’t describe the blocked platforms as linked to the International Development Bank or any specific sanctioned party.

The measure’s stated purpose is to curb illicit dollar flows and currency speculation while applying the Central Bank of Iraq’s regulatory framework in the Kurdistan Region. The government says the restrictions close a route for currency movement outside the formal banking system. Providers must implement the block immediately.