Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, explained today, Friday, the gains of adopting the electronic payments system in transactions inside Iraq, and while he indicated that among them is providing the most efficient use of the monetary mass, he stressed that Iraqi law rejects the use of the cash dollar in settlements. Interior.
Saleh said, “The cash payments system is linked to a high degree of certainty whenever payments are made by electronic or digital means, which provides an indicator of liquidity for the banking system and reduces the degree of uncertainty in banking liquidity.”
He added, “The payments system provides sufficient information about the flow of cash into the banking system, makes clear the amounts of paid and accumulated amounts, and indicates their actual balances at all times during the banking working day. Conversely, in light of monetary systems that rely on direct cash payment, banking liquidity management policies surround… It also uses additional hedges of idle liquidity in order to guard against liquidity risks.
He continued, “This matter disrupts an aspect of banking operations and credit in particular, so as electronic payments increase as a behavior in daily dealings, the management of the cash mass and its flow in the banking system will be subject to the rule of clarity in cash management and then directing bank credit towards profitable areas by expanding activity.” Credit is what provides efficient use of the cash mass, as well as a decrease in the rate of cash leakages outside the banks, which means that a structural change in the behavior of cash demand among individuals and at banks will tend towards a decline due to dealing with electronic payment systems that are linked to bank accounts.”
Saleh continued, “Thus, the development of the payments environment and its transition from the direct cash environment or cash payment in payment and receipt operations to the use of electronic payment will, in all cases, reduce the risks of local cash payment in currencies other than the dinar and distance the national economy’s transactions from cash payment in foreign currency.” Because digital payment systems do not allow transactions in the local economy in anything other than the dinar, that is, the national currency, and certainly the economy’s tendency in its transaction payments is to (the digital dinar) instead of (the cash dollar), whose transactions in internal settlements are legally rejected completely by virtue of the principle of monetary sovereignty of the dinar. “Iraqiya.”
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