One of the most significant worldwide developments during Covid-19 was the increase in consumer engagement in financial markets, many for the first time especially in Iraq. The coronavirus outbreak has acted as a catalyst for a digital revolution facilitated by financial technology (fintech).

The fintech space is not subject to specific legislative and regulatory provisions in Iraq as this is a new and emerging Market.

Fintech Entities are subject to specific complex ambiguous laws and regulations applying to banks, financial institutions, and insurance companies if they carry out such regulated activities.

Entities must seek legal guidance before operating in Iraq to determine any special registration or authorization requirements, which vary depending on whether the fintech engages in a regulated business such as electronic payment services, which requires a license from the Central Bank of Iraq.

When considering operating in the FinTech Market of Iraq, it’s best to consider the below legal Acts and precedents.

Iraqi Banking laws and regulations:

• Central Bank of Iraq Regulation (28/2/1994);
• Central Bank Law (56/2004);
• Banking Law (94/2004);
• Financial Investment Companies Regulation (6/2011);
• Central Bank of Iraq Regulation (611/14 of 2019)
• Central Bank of Iraq Regulation (1/2018) as amended by Regulation 30/12/2019.

Iraqi Technology laws and regulations:

• E-signature and E-transactions Law (78/2012); and
• Electronic Payment Services System Regulation (3/2014)

Iraqi Technology laws and regulations:

• E-signature and E-transactions Law (78/2012); and
• Electronic Payment Services System Regulation (3/2014);

Other Iraqi laws and regulations:

• Civil Code (40/1951);
• Penal Code (111/1969);
• Companies Law (21/1997);
• Capital Markets Interim Law (74/2004);
• Insurance Business Regulation (10/2005);
• Consumer Protection Law (1/2010); and
• Anti-money Laundering and Counter-Terrorism Financing Law (39/2015).

Iraq has not enacted a specific law to govern the fintech space but there are some legal doctrines which may apply to certain regulated activities carried out by fintech entities, e.g., “The provision of electronic payment services”. Based on the Electronic Payment Services System Regulation (3/2014), the providers of electronic payment services must obtain a license from the Central Bank of Iraq (CBI).

The Supplier

The Central Bank of Iraq should issue a license to the supplier of such services. The license is valid for five consecutive years and can be renewed by the Provider by submitting a written request to the Central Bank of Iraq 90 days before the license expires.

The Supplier must be a legal entity that has the organizational and technical skills to operate the required mechanism, takes all measures to secure and protect electronic transactions, ensures that the Central Bank of Iraq can enter the used system at any time for supervision and control purposes, and has submitted an economic feasibility study to the Central Bank of Iraq.

The Benefactor may designate an agent or agents and authorize them to provide electronic payment services. The Provider must disclose to the Central Bank of Iraq all agent information, including name, address, internal control methods utilized by the agent, description of the services supplied by the agent, and any other information deemed required by the Central Bank of Iraq. The agent’s identity will be entered in a public record at the Central Bank of Iraq, and the Provider is required to notify the Central Bank of Iraq of any changes connected to the agent to be corrected in the above-mentioned record. The following duties of the Provider are specified in Article 16 of the Regulation (list of duties are provided in Annex 1).

If the Benefactor offers electronic payment services through mobile phone “App”, he is required to

• Sign formal agreements with mobile operators and send copies to the CBI.
• The payment procedure will take place within Iraq and in local currency which is Iraqi Dinars (IQD).
• Account settlement via the instantaneous overall settlement system, or through a guarantor bank in the absence of a settlement bank account.

Responsible authority to enforcing the applicable laws and regulations?

• The CBI is responsible for granting licenses to institutions that conduct banking operations and to electronic payment service providers.
• The Iraq Securities Commission is responsible for supervising the Iraq Stock Exchange and issuing laws relating to investment management activities and investment advice for brokers, banks, and securities companies.

As outlined by the Decision 14/611 of 2019 on governance and institutional management of information and communication technology in the banking industry, the Central Bank of Iraq has taken a favorable stance toward fintech. When interacting with cloud computing service providers, this judgment establishes certain standards that banks, financial institutions, and other licensed institutions must follow. Furthermore, the Electronic Payment Services System Regulation (3/2014) allows non-bank payment service providers to offer electronic payment services subject to a license from the Central Bank of Iraq.

The Iraqi Central Bank has a negative perception on the use of cryptocurrency. It barred the usage of cryptocurrencies, which are subject to sanctions under the Anti-Money Laundering and Counter-Terrorism Financing Law.

Fintech Industry in Iraq

The fintech business in Iraq will become massive in the upcoming years however it is currently limited to a few sub-sectors.

Online shopping, trading and electronic services, and smartphone applications are some of the “Hot” growing Information system fields that are maturing progressively.

In comparison to other nations in the middle east, Iraq is sluggish to adopt fintech, and overall investment in fintech market and the passage of associated regulations is low. This is attributable to a variety of reasons, including the following:

• The significant number of the unbanked population – according to a World Bank Group only 23% of Iraqi households have access to a financial institution’s account. However, we do see a change regarding government employees who are now getting paid Via Master Card & bank accounts rather than the old cash payment procedure.
• The relative cost of internet and mobile services to income, which limits demand for digital financial services.
• Due to worries about the security of online payments, Iraqis prefer cash on delivery in e-commerce transactions.

Although the use of mobile and electronic payment systems is growing, it is still not as widespread as it is in other nations in the region. Cash payment up on delivery when ordering goods online and money transfer “hawala” are the most prevalent payment options, with credit cards being used infrequently. Iraq’s primary underdeveloped areas are e-commerce (food, real estate, shipping, transportation, and travel services), e-banking, and digital payments.

Managing deposits and cash withdrawals through automated teller machines (ATMs), as well as executing electronic debit and credit payments, are among the electronic payment services authorized in Iraq. These electronic payments are performed using any type of digital communication and information technology, such as a network operator acting as a middleman between the user and the service provider, or any other receiver, via mobile phone transfers.

Electronic payment service providers with an Iraqi license may also facilitate to acquire bank loans that are delivered directly to the user’s credit card.

The typical structure of fintech companies

The E-signature and E-transactions Law governs electronic transactions in Iraq. Online and technology enterprises, on the other hand, are not regulated in Iraq. This means that unless they have a physical office address in Iraq, e-commerce sites and mobile applications are not legally deemed enterprises. As a result, most tech start-ups choose to register their firms as “bricks and mortar” businesses in order to gain legal legitimacy.

Fintech services are also supplied by banks that operate under the supervision of the Iraqi Central Bank (CBI).

Regulations

Article 27 of the Electronic Signature & Electronic Transactions Law No. 78 of 2012, which states that the electronic transfers of money should be regulated by a regulation that to be suggested by the Central Bank of Iraq (CBI), the Iraqi Council of Ministers issued Regulation No. 3 of 2014 regarding the Electronic Payment Services of Money (The “Regulation”).

This Regulation covers all the electronic payment activities including issuing the electronic payment tools, managing the deposits and cash withdrawals through ATMs and selling points, implementing of electronic payment processes (payable and receivable) that their money be guaranteed by the credit of the services user or by any means of digital communications or information technology, and implementing of electronic payment processes in accordance with the overall settlement system or the clearing mechanism system.

-Iraqi business news

“Emerging markets” is a term that refers to an economy that experiences considerable economic growth and possesses some, but not all, characteristics of a developed economy. Emerging markets are countries that are transitioning from the “developing” phase to the “developed” phase.

Characteristics of Emerging Markets

Some common characteristics of emerging markets are illustrated below:

1. Market volatility

Market volatility stems from political instability, external price movements, and/or supply-demand shocks due to natural calamities. It exposes investors to the risk of fluctuations in exchange rates, as well as market performance.

2. Growth and investment potential

Emerging markets are often attractive to foreign investors due to the high return on investment they can provide. In the transition from being an agriculture-based economy to a developed economy, countries often require a large influx of capital from foreign sources due to a shortage of domestic capital.

Using their competitive advantage, such countries focus on exporting low-cost goods to richer nations, which boosts GDP growth, stock prices, and returns for investors.

3. High rates of economic growth

Governments of emerging markets tend to implement policies that favor industrialization and rapid economic growth. Such policies lead to lower unemployment, higher disposable income per capita, higher investments, and better infrastructure. On the other hand, developed countries, such as the USA, Germany, and Japan, experience low rates of economic growth due to early industrialization.

4. Income per capita

Emerging markets usually achieve a low-middle income per capita relative to other countries, due to their dependence on agricultural activities. As the economy pursues industrialization and manufacturing activities, income per capita increases with GDP. Lower average incomes also function as incentives for higher economic growth.

The Five Major Emerging Markets

Brazil, Russia, India, China, and South Africa are the biggest emerging markets in the world. In 2009, the leaders of Brazil, Russia, India, and China formed a summit to create “BRIC,” an association created in order to improve political relationships and trade between the largest emerging markets. South Africa joined the “BRIC” group in 2010, which was then re-named “BRICS.”

1. Brazil

Brazil’s economy on a relative basis grew rapidly during the early 2010s at a rate of 7.5%. Due to political instability and trade sanctions, however, the growth rate slowed down and became negative in 2016 (-3.5%). Brazil also experienced considerable improvements in income levels and poverty reduction in 2003-2014, but changes have been sluggish since 2015 due to lower economic activity.

The Brazilian economy has been affected largely by political uncertainties and lower government expenditure. However, the outlook for the country’s future is positive. The domestic economy grew 0.6% in 2019 and is expected to sustain the growth through infrastructure improvements and foreign investments, along with its reliance on agricultural commodities like soybean and coffee.

2. Russia

Driven primarily by oil exports and a rise in oil prices, Russia experienced exponential growth in its GDP during the period 1999-2008 (before the Global Financial Crisis). The transition from communism to capitalism that has been taking place since 1991 has boosted economic growth in the country through economic reforms and an export-oriented trade policy.

However, since 2014, Russia’s economy has been negatively affected by political conflicts and trade sanctions that have been imposed by the US, Canada, Japan, and the EU, along with fluctuations in the price of oil, which accounts for close to 52% of Russian exports. The Russian economy grew at a rate of 1.7% in 2019 and is expected to grow faster if geopolitical tensions with trade partners like the US, Canada, Japan, and the EU reduce.

3. India

India established itself as an emerging market after trade liberalization and other major economic reforms in 1991. The Indian economy has been growing steadily at relatively high rates. It averaged 7.1% in the past decade, with some fluctuations due to political instability and economic reforms.

Essentially, India’s long-term economic growth can be attributed to the expansion of the manufacturing and service sectors, driven by exports and foreign investment. India is also experiencing gains both in capital and labor productivity due to technological advancements and educational reforms. As of now, India is one of the largest emerging markets, along with China.

4. China

The Chinese economy has posted an average growth rate of 10% since the enactment of trade liberalization and economic reforms in 1978. China’s economic growth has been propelled by government spending, expansion of its manufacturing sector, and exports (specifically electronic equipment).

However, the country’s income per capita is still low. Although only 3.3% of the Chinese population lives below the poverty line, 30% of the population lives below US$5.50/day. Nonetheless, as the Chinese government focuses on increasing GDP through consumption, disposable incomes are likely to increase, leading to sustained economic growth.

5. South Africa

South Africa was inducted into the BRICS association in 2010, after experiencing negative GDP growth in 2009 following the 2008 Global Financial Crisis (-3%). Following the financial crisis, the South African government implemented a number of policies to boost GDP through government expenditure and consumption. Economic growth increased in 2010-12 before slowing down in 2012-16 and rising again in 2017.

South African exports are composed primarily of commodities from mining. Therefore, export volumes depend on the prices of commodities, which are highly volatile. Fluctuations in export volumes explain part of the variation in GDP growth over the last few years.

Although South African GDP per capita has been increasing over time, so has the unemployment rate (29% as of 2019). High levels of unemployment and crime have hindered the economy’s growth and investment potential and are issues that need to be addressed through policy reforms.

Investopedia

Fuel cells powered by natural gas are an extremely exciting and promising new technology for the clean and efficient generation of electricity. Fuel cells have the ability to generate electricity using electrochemical reactions as opposed to combustion of fossil fuels to generate electricity. Essentially, a fuel cell works by passing streams of fuel (usually hydrogen) and oxidants over electrodes that are separated by an electrolyte. This produces a chemical reaction that generates electricity without requiring the combustion of fuel, or the addition of heat as is common in the traditional generation of electricity. When pure hydrogen is used as fuel, and pure oxygen is used as the oxidant, the reaction that takes place within a fuel cell produces only water, heat, and electricity. In practice, fuel cells result in very low emission of harmful pollutants, and the generation of high-quality, reliable electricity. The use of natural gas-powered fuel cells has a number of benefits, including:

• Clean Electricity – Fuel cells provide the cleanest method of producing electricity from fossil fuels. While a pure hydrogen, pure oxygen fuel cell produces only water, electricity, and heat, fuel cells in practice emit trace amounts of sulfur compounds and very low levels of carbon dioxide. However, the carbon dioxide produced by fuel cell use is concentrated and can be readily recaptured, as opposed to being emitted into the atmosphere.

• Distributed Generation – Fuel cells can come in extremely compact sizes, allowing for their placement wherever electricity is needed. This includes residential, commercial, industrial, and even transportation settings.

• Dependability – Fuel cells are completely enclosed units, with no moving parts or complicated machinery. This translates into a dependable source of electricity, capable of operating for thousands of hours. In addition, they are very quiet and safe sources of electricity. Fuel cells also do not have electricity surges, meaning they can be used where a constant, dependable source of electricity is needed.

• Efficiency – Fuel cells convert the energy stored within fossil fuels into electricity much more efficiently than traditional generation of electricity using combustion. This means that less fuel is required to produce the same amount of electricity. The National Energy Technology Laboratory estimates that, used in combination with natural gas turbines, fuel cell generation facilities can be produced that will operate in the 1-to-20-Megawatt range at 70 percent efficiency, which is much higher than the efficiencies that can be reached by traditional generation methods within that output range.

The generation of electricity has traditionally been a very polluting, inefficient process. However, with new fuel cell technology, the future of electricity generation is expected to change dramatically in the next ten to twenty years. Research and development into fuel cell technology is ongoing, to ensure that the technology is refined to a level where it is cost-effective for all varieties of electric generation requirements.

NaturalGas.org

 The end of the year means different things for different people as they come up with resolutions and set their intentions to improve various aspects of their lives. But there’s one thing that everyone should do as the calendar starts to move towards another January — take stock of their personal finances and make any necessary moves before the new year. Here’s what you need to do before the end of the year to make the most of your personal finances.

• Go over your financial plan: A lot can happen in a year. You may have made a major purchase, gotten a raise or gone on a vacation. This can have a big impact on your financial plan. You should check in with your financial advisor if you have one — or find one if you don’t.

• Rebalance your portfolio: In addition to checking in on your overall financial plan, you should also examine your investment portfolio to see if you might benefit from rebalancing your portfolio. This is especially true in 2022; the market has been extremely volatile, and you may need to take a look at your asset allocation. Switch money from stocks to bonds or vice versa if needed. This is also a good time to think about if there are any investments, you’re ready to move on from – or if there is a new investment you want to consider making.

• Think about taxes and tax-loss harvesting: Taxes aren’t due until April, but that doesn’t mean you can’t start thinking about your tax bill right now. One specific way you can address taxes right now is tax-loss harvesting. Tax-loss harvesting is a process by which you can reduce your tax bill by selling securities at a loss. It is very important that you get this process right, as there are a lot of rules and regulations you’ll have to follow, so it makes sense to work with a financial advisor on this one.

• Assess your charitable giving: Giving to charity is a good idea for a variety of reasons. First off, it makes you feel good, and it does good for others. While those are obviously good enough reasons to give to charity, the third reason may be what pushes you over the edge: you can get a tax break. Charitable contributions are tax deductible, meaning you can end up owing less once you’ve filed. You have to make the deductions by the end of the year, though, to get the deduction on this year’s taxes, so write those checks and get them in before the new year.

• Consider your debt: The end of the year is also a good time to check in on your debt. If you got a Christmas bonus, for instance, you could use it to pay down some debt, whether it is outstanding credit card debt or a student loan that needs to be paid down.

• Make contributions to your retirement plan: You can contribute up to $20,500 to your workplace retirement plan, such as a 401(k) in 2022. If you want to max out your contributions for this year, you’ll need to make sure you make any contributions by the end of the year. If you’ve already maxed out your contributions for this year, the maximum contribution will go up to $22,500 in 2023. You can also make contributions to your individualized retirement plan, up to the limit of $6,000 for 2022. You do have a bit of extra time on this one, though, as you can allocate contributions for this year until Tax Day.

• Consider Medicare prices: If you’re old enough to be enrolled in Medicare, you need to make sure you know about price changes that will be coming in 2023. This is one where you’ll actually save a bit of money: the standard monthly premium for Medicare Part B will go down from $170.10 to $164.90 in 2023. That isn’t exactly a windfall, but hey, it beats a price hike.

• Look at your Social Security increase: Social Security, on the other hand, is going up, and in a big way. Due to record inflation in the past year, the increase will be 8.7 percent. Make sure you take that into account when considering your budget for 2023.

• Review your estate plan: The end of the year is also a great time to review your estate plan. There could be changes you want to make. If you’ve come into money or bought a new house, for instance, you’ll want to adjust your will. You should also check on the beneficiaries for all of your retirement accounts, especially if you’ve gone through a major life event like a wedding, a divorce or the birth of a child.

-Crain’s Detroit Business

What’s the difference between cryptocurrency and paper currency? They definitely aren’t the same thing, but at the same time, the difference between them is less than what most people probably assume. In this blog post from the Noble Institution, we’ll look at what paper currency really is –and how cryptocurrency is both similar and different.

Early Paper Currency

Early paper currency took the form of banknotes. A banknote was simply a written promise from a bank to issue a certain quantity of gold on request. Banks issued so many banknotes that they would have collapsed if everyone had presented their banknotes at the same time –they didn’t have that much gold on hand!

Fiat Currency

Eventually, governments started to form their own banks and issue their own banknotes, a type of money known as “fiat currency” because it’s issued by government fiat. Once fiat currency existed, it was only a matter of time before private banks were forbidden from issuing their own banknotes. The government, just like the banks, did not really have enough gold to cover every banknote.

Modern Currency

In 1971, U.S. President Nixon abolished the connection between U.S. Dollars and gold. Ever since then, paper currency in the U.S. has been purely symbolic. However, it’s still the case that banks do not hold on to enough cash to cover all the money held in their accounts. Instead, they use that money for investments and loans, meaning that if everybody took out their money at the same time, the bank would collapse. Paper currency, like its predecessor the banknote, is more theoretical than real.

Cryptocurrency

Cryptocurrency simply takes this process one step further. Now that “paper currency” is mostly digital (existing only in the bank’s computer system!), it makes sense to create a truly digital form of currency. Cryptocurrency is purely digital, with no paper format all. However, it isn’t any less real than the money stored in your bank account.

The biggest difference between paper currency and cryptocurrency is that paper currency is issued by fiat from a government-controlled bank like the Federal Reserve. Cryptocurrency is decentralized, not issued by the government, and not stored in any bank. Instead, cryptocurrency is stored in the distributed blockchain ledger, which is protected from any unauthorized changes by advanced cryptography. In a way, cryptocurrency has brought back the old way of doing things, where currency was not issued or controlled by the government.

Contact The Noble Institution at 1-833-645-1535 to get started trading cryptocurrency today!