Iraq blocks TikTok payments, igniting controversy over digital freedom and control
Shafaq News/ Iraq’s Central Bank (CBI) has ordered a freeze on financialtransactions involving TikTok agents, sparking a national debate over the app’sinfluence and the broader question of social media regulation.
On December 1, the CBI directed licensed banks and non-banking financialinstitutions to cease all incoming and outgoing transfers associated withTikTok agents in Iraq.
The directive, issued at the request of the Ministry of Communications,aims to curtail the financial operations of the app within the country. Thisdecision will likely shrink financial gains for TikTok users by disruptingin-app purchases and virtual transactions, such as the sale of digitalgifts.
The move comes amid a growing discourse on TikTok’s role in Iraqisociety. Over the past year, the government has deliberated over whether to banthe app, citing concerns about its societal impact.
In a March 2024 press conference, Minister of Communications HayamAl-Yasiri criticized the platform for contributing to “social fragmentation”and providing “little educational value.”
Despite these criticisms, TikTok remains the most popular social mediaplatform in Iraq, boasting 31.9 million users—an increase from 23.88 millionlast year and surpassing Facebook, Instagram, and YouTube.
TikTok’s Monetization Mechanism
TikTok has transformed the way many Iraqis earn income. The platform’s“tipping” feature allows users to accumulate virtual gifts, which can then beconverted into real money.
Users purchase TikTok Coins, a virtual currency, to buy these gifts.Once received, content creators can convert the digital rewards into cashthrough processes that often involve local agents or international financialservices.
This ecosystem has created a burgeoning economy around TikTok in Iraq,but the CBI’s decision could disrupt these earnings. Many TikTok users rely onfinancial intermediaries—known as agents—to facilitate cashouts. These agentsprocess transactions locally and internationally.
Direct Impact on Agents
Mohamed Sameer Al-Lami, a TikTok agent in Iraq, expressed concerns aboutthe directive. “This decision affects me directly, but it doesn’t impactregular TikTok users hosting live streams,” Al-Lami told Shafaq News.
According to him, live streamers’ earnings are deposited in theirpersonal in-app wallets, which can be withdrawn through platforms likePayoneer, MoneyGram, or bank transfers—even from outside Iraq.
Al-Lami revealed plans to shift his operations to a UAE-based bank tobypass the restrictions. “This move ensures that my earnings remainunaffected,” he said, highlighting the workaround options still available formany agents and users.
Ambiguity in the Decision
The rationale behind the central bank’s directive remains unclear,sparking speculation about its underlying motives.
Legal expert Walid Al-Shibli told Shafaq News that the decision lackstransparency. “It’s uncertain whether the move is politically motivated, a responseto technical or security concerns, or part of broader geopolitical tensions,”he said.
Al-Shibli noted that TikTok’s Chinese origins might place it within thecrosshairs of US-China competition, a rivalry that extends to technology andsocial media.
“If this decision serves anothernation’s interests at Iraq’s expense, affected parties could legally challengeit under Iraqi Civil Procedure Law. However, if it’s based on national securityconcerns, such as addressing cybersecurity risks or preventing moneylaundering, it aligns with state policy.”
Broader Implications for Social Media in Iraq
Financial and banking expert Mustafa Hantoush pointed out that Iraq’slimited engagement with global social media platforms complicates effectiveregulation. “These companies don’t have direct branches in Iraq, so they relyon local agents who act more like general offices rather than officialrepresentatives,” Hantoush explained.
He argued that halting financial transfers to TikTok’s agents equates toa de facto ban on commercial activities tied to the app, such as advertisingand promotions, which “could disrupt millions of dollars in trade facilitatedby these platforms,” he warned, advocating for stricter regulation overoutright bans.”
Hantoush highlighted the growing role of social media in Iraq’s digitaleconomy, describing platforms like TikTok as “significant e-commerce hubs.”Disrupting their financial operations, he suggested, could have unintendedeconomic consequences.
Social Impact and the Call for Balance
Beyond financial concerns, TikTok’s societal influence has drawncriticism from social researchers. Amal Al-Kabashi noted that while theplatform has become a source of income for some users, it has also encouragedproblematic content. “Many users resort to trivial or even unethical topics,including offensive language, to attract more followers,” she told ShafaqNews.
“It’s troubling to see millions of followers gravitate toward creatorswho lack meaningful or educational content,” she added.
However, Al-Kabashi cautioned against blanket restrictions. “Denyingaccess to such services could harm users who rely on the platform forlegitimate income. The solution lies in regulating these activities to promotesocietal awareness while ensuring accountability without infringing on freedomof expression.”
The Path Forward
Iraq’s decision to halt financial transfers for TikTok agents could marka step in the country’s efforts to regulate the influence of social mediaplatforms. While the directive directly targets TikTok’s monetizationmechanisms, its broader implications touch on questions of digital freedom,economic impact, and societal values.
