The Trump administration has threatened Iraq to lose access to their Oil account at the New York Fed if they ask the U.S. troops to leave the country according to a report from The Wall Street Journal.
The government of Iraq maintains bank accounts with the New York Fed in order to manage finances and especially revenue from oil. Losing access to these accounts could shock Iraqi’s already troubled economy.
The possibility of U.S. sanctions against Iraq emerged after the killing of the Iranian top general Qassem Soleimani at the Baghdad International Airport. Two days later the Iraqi parliament voted to dispatch the U.S troops from the country.
The New York Fed doesn’t release public information about the money held on those accounts belonging to the Iraqis central bank. But, as indicated by the Central Bank of Iraqi’s latest statement, at the end of 2018, the New York Fed held about $3 billion in overnight deposits.
Blocking Iraqi access to dollars could make the Iraqis dinar’s value fall, as it did in 2015, which could again trigger a rush for dollars in Iraq as investors, banks and individuals try to secure safe assets.
Such a devaluation could cause large economic problems in a country already struggling with many problems.
Weaponizing money is like degrading it to function as money and this is what the U.S is doing. Economic sanctions have been always a way to make pressure on countries in order to do something – or in some cases, in order to not do something. But using money as a weapon is a new thing that is happening recently.
Picture Credit: Dominik Meissner
A year ago the U.S. kicked out Iran from the SWIFT system and now Iraq is threatened with their account at the New York FED. It is only a matter of time while this becomes a standard with governments weaponizing the money which is scary thinking about the consequences this might have.
This is why people should protect themselves by buying bitcoin as a hedge against Fiat money that can be restricted by governments and banks. Looking at the recent events happening in Lebanon where people are restricted to withdraw even their wages or in countries like Hong Kong where banks block accounts that fund the protests it is a fresh example of how money can be weaponized to control people.
It is only a matter of time until more people realize how dangerous is our monetary system with governments and bankers eager to control their lives. Bitcoin as an alternative for more freedom is helping to make them realize this faster.