Only about 25-40% of eligible voters are expected to participate in Iraq's 2025 parliamentary elections, reflecting deep disillusionment with the political system. This low turnout highlights a broader trend of skepticism toward meaningful change in a country plagued by corruption and militia influence. Despite this, emerging economic sectors like decentralized finance (DeFi) offer potential for innovation.
The Mood at the Polls
Iraqis express little optimism as they cast ballots on November 11, 2025. Polls indicate widespread belief that entrenched elites will maintain control, limiting reforms.
According to a Chatham House analysis, turnout could shape power distribution among established actors. This echoes past elections where promises fell short.
Voter apathy stems from unaddressed issues like economic instability and security threats. Many see the vote as a mere redistribution of power.
Linking Politics to Economic Reforms
The elections test Iraq's fragile stability, with Prime Minister Mohammed Shia al-Sudani seeking re-election. His administration has pushed digital advancements, but crypto remains banned.
A recent UNDP report notes Iraq's 2024 Digital Payment regulation as a step toward a digital economy. This could pave the way for broader financial innovations.
, or decentralized finance, involves blockchain-based services like lending without intermediaries. In Iraq, it represents untapped potential amid traditional banking limitations.
Projections from Statista forecast Iraq's DeFi revenue at $88.1 million in 2025, signaling growing interest despite restrictions. This growth depends on regulatory shifts.
Current State of Crypto regulation in Iraq
The Central Bank of Iraq banned cryptocurrencies in 2017, citing risks like volatility and financial crimes. This prohibition extends to using electronic cards for crypto trading.
According to Freeman law, the aims to prevent unauthorized transactions, but underground mining and peer-to-peer trading persist among youth.
Al Nesoor law Firm reports a decentralized network of Iraqis engaging in crypto despite regulations. This highlights enforcement challenges.
The CBI is studying crypto regulation focused on anti-money laundering and financial stability, per recent announcements. This could integrate digital assets into the economy.
Potential Impact of Election Outcomes
If al-Sudani's coalition strengthens, it might accelerate digital reforms, including revisiting crypto bans. Analysts suggest post-election stability could encourage foreign investment in fintech.
A ResearchGate study finds Iraqi authorities lack tools to fully curb illegal crypto use, urging better frameworks. Learning from UAE and US models could help.
platforms offer alternatives to centralized finance, potentially aiding unbanked populations in Iraq. regulation would need to balance innovation with security.
Fragmented politics, as noted by the Atlantic Council, may delay reforms, keeping DeFi on the fringes. Voters' low expectations reflect this inertia.
Challenges for DeFi Adoption
High volatility and lack of oversight deter mainstream use in Iraq. DeFi's decentralized nature clashes with current bans.
Reports indicate unofficial trading continues, but without regulation, risks like fraud persist. This underscores the need for clear policies.
Opportunities Ahead
Elections could shift focus to economic modernization, integrating DeFi into national strategies. International pressure might encourage progressive regulations.
A Duke University paper discusses DeFi infrastructure, relevant for Iraq's rebuilding efforts. Blockchain could enhance transparency in finance.
The CBI's move toward digital currency addresses liquidity issues, potentially opening doors for regulated crypto. This aligns with global trends.
Iraq's youth-driven crypto interest, per various sources, signals demand for change. Post-election coalitions might prioritize this.
Conclusion: Relevance to and regulation
These elections underscore how political stagnation hampers economic progress in areas like and regulation. A shift toward inclusive policies could unlock Iraq's digital potential, fostering growth in decentralized finance amid global fintech advancements.
