The Iraqi government will ban all cash withdrawals and transactions in US dollars from January 1, 2024.
Iraq, a dollarized country
Let us recall for more context that Iraq has been virtually vassalized by the United States since the hanging of Saddam Hussein.
We often hear that the Second Gulf War was a “war for oil”. Truth be told, it was a war for the petrodollar.
It was about getting rid of Saddam Hussein who had just denominated Iraqi oil in euros rather than dollars. “The dollar will be replaced by other foreign currencies, including the euro”then had declared Finance Minister Hekmat Ibrahim al-Azzaoui.
Excellent news for the old continent, the leading importer of Iraqi oil, which was offered the same exorbitant privilege as the United States. That is to say, exchanging paper (debt) for oil.
The single currency was in decline at the time, at its historic low, around 0.82 euros per dollar. Iraqi favor allowed it to appreciate by 30% in the space of a few months.
Everyone knows the rest. Dick Cheney, George Bush’s vice-president, will push Colin Powell to lie before the United Nations about Saddam’s famous weapons of mass destruction.
The Iraq War was a demonstration of force to show Europe as well as the Gulf countries what it costs to refuse imperial currency. Oil sales will be denominated in dollars immediately after the capture of Baghdad.
The color of the bill in which energy is sold is at the root of all the wars that break out in every corner of the world. The war in Ukraine is no exception.
The return of the dinar
Twenty years after the operation Desert Storm, all Iraqi oil revenues are still paid into an account opened with the American Federal Reserve. In other words, the US Treasury directly controls Iraqi foreign exchange reserves.
Iraqi MP Hussein Mouanes declared to The Cradle in May : “Iraq continues to be a slave to the American dollar […]. Our government doesn’t really control its own money. It is crucial to move away from the hegemony of the dollar, especially since it has become a tool to impose sanctions on countries. It is time for Iraq to rely on its national currency.”
With more than $100 billion in dollar reserves, Baghdad is at the mercy of the United States. The US Treasury has also sanctioned fourteen private Iraqi banks due to trade with Syrian and Iranian neighbors.
All this to say that the US Treasury has denied last month to transfer a billion dollars in cash to Iraq. Exasperated, the Iraqi Central Bank finally took the decision to prohibit cash withdrawals and dollar payments from January 1, 2024.
After this date, dollars can only be withdrawn in dinars at the official rate of 1,320 dinars (compared to 1,560 on the parallel market).
“Want to transfer money? Go for it. Want a dollar card? That’s it, you can use the card in Iraq at the official rate, or if you want to withdraw money, you can do it at the official rate in dinars. And don’t talk to me about dollars in cash anymore.”a representative of the central bank told Reuters.
However, some Iraqis seem to be very keen on the occupier’s cash:
What about bitcoin?
The country of two rivers will take its destiny back into its own hands within three months. The objective is to dedollarize an economy which has seen the greenback impose itself because of the recurring monetary crises caused by the war.
This is the latest snub for the United States in a region where Iran, Saudi Arabia and the United Arab Emirates have just joined BRICS, an organization openly hostile to the dollar.
“There is no problem in discussing how we settle our trade agreements, whether in US dollars, euros or Saudi rials”had already declared the Saudi Minister of Finance in February at the microphone of Bloomberg during the World Economic Forum.
Coming back to Iraq, this is a country that should be more interested in bitcoin. Especially since its Iranian neighbor is already using it to settle part of its imports. Iran has controlled up to 5% of the bitcoin hashrate (as of 2021).
Iraqis and Iraqi banks would be well advised to use bitcoin to trade without fear of retaliation from the United States.
No one can prevent a transaction in bitcoin which also has the advantage of being the best store of value in the history of humanity. What to protect yourself in the event of new American perfidy.
Not to mention the constant devaluation of the dollar. As Vladimir Putin declared at Valdai Chat club this Thursday, the United States has printed 9.5 trillion dollars since the start of the Covid psychosis…
And as the US government’s debt soars, it is high time to turn away from the dollar. Iraq understood this in the year 2000…
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