Years ago banks like Chase, Wells Fargo, Fifth Third, and others sold the Iraqi Dinar. In the past year or two most if not all banks have stopped selling the Iraqi Dinar, though some people online report some smaller banks and credit unions can still get Dinar for you.
This has caused a lot of people to wonder why banks have ceased selling the Iraqi Dinar currency. That is the topic we are going to address today.
Shortly after banks stopped selling the Iraqi Dinar I called a bank and asked why. The banker told me once they found out everyone was buying the Dinar as an investment they decided to stop selling it. Now I find it hard to believe that banks actually thought people were going to this war torn country for Spring Break or Tourism, though I suppose they could be selling it to service people and contractors working in Iraq, however with the volume they were selling you'd have to imagine they knew all these people couldn't be going to Iraq.
Why would this matter to the bank the reason people were buying the currency though? I think it boils down to three main things which I'll explain as to the reasons banks stopped selling the Dinar. First off it's a hassle for them, secondly though there's nothing illegal about selling Dinar a bank may just want to stay clear of any controversey, and thirdly, the Dinar is not a pegged currency and is not a traded currency, nor is it a stable currency so they may have wanted to stay away from it for those reasons. In the rest of this post we'll expound upon these reasons banks have stopped selling the Iraqi Dinar.
The first reason I mentioned for the banks to stop selling Dinar was because it was more trouble than it was worth. Not just the Dinar but foreign currency in general. Banks are in the business of handling checking accounts, CD's, giving loans, they are not really in the FX or foreign currency business. Getting foreign currency for customer is more a convenience or a courtesy they provide to their customers. Many banks these days are getting rid of their FX servies altogether and either oursourcing it or outright sending customers to other companies. Banks offer competitive rates so they are really not making money on the foreign currency, they are probably covering their costs if that and just doing it as a currency for customers.
The Dinar however, I imagine, was even more of an inconvenience than other currencies. It's one thing if once a year a customer wants to come in and get a few hundred dollars worth of Mexican Pesos for an upcomming cruise, however as you know with Dinar customers, people often buy anywhere from a few hundred dollars worth to a few million Dinar with every paycheck or every few weeks. This is much more costly for the bank in terms of getting the currency in as well as just a hassle to have someoen comming in every week requesting special orders of $50 or $100 worth of Dinar.
In addition to just ordering it then you have customers who want to talk to the personal bankers and wealth management experts at the bank about the new found wealth they are going to have after the Dinar revalues. The bank most likely doesn't believe the DInar will revalue or even know anything about the Dinar revaluing and you have Dinar customers who oftentimes may not have any real wealth hassling them wanting to talk to wealth management experts and asking all the bankers questions about a highly speculative, hypothetical scenario that may make them rich down the road.
This is one reason why banks stopped selling Iraqi Dinar. They were making little if any money on it and it was probably more of a hassle than it was worth to them. You also had people opening up accounts with banks that dealt with Dinar for the sole purpose of buying Dinar but not using the accounts for actual banking. This is just a drain on the banks resources and they aren't making any money from those customers, and in actuality those customers are probably costing the bank money.
Next we mentioned how a part of the reason why banks stopped selling Dinar was because people were telling them the Dinar they were buying was an investment. By law investments need to be registered with the SEC. In order to give investment advice someone also needs to be licensed as well.
Though the banks never marketed the Dinar as an investment banks tend to be cauteous and I imagine most banks figured they didn't want to be involed in this grey area of the law. Though they weren't marketing the DInar as an investment if people were comming in and outright telling them I'm buying this as an investment they probably just didn't want to be a part of it.
Lastly, another reason banks likely stopped dealing with the Iraqi Dinar was because the Dinar is not a pegged currency or is not a traded currency. The Iraqi Dinar is not on the Forex markets. Most currencies, including the Vietnam Dong, are pegged or tradeable currencies. Their rates are based upon other world currencies and trading. That is not the case of the Iraqi Dinar. The rate of the Iraqi Dinar is essentially made up by the Central Bank of Iraq, often referred to as the CBI.
Because the CBI essentially makes up the rate there's not a lot of confidence behind the rate. Add to that the political unstability of the region, I mean techincally Iraq could fall into a Civil War tomorrow and the government could fall apart and Iraq could essentially no longer be a country which would mean they no longer had a currency. Banks generally sit on large reserves of whatever they sell. Hypothetically if a bank were sitting on $100,000 worth of Iraqi Dinar tomorrow it could go to half of what it's worth or even zero and the banks left holding the bag.
I'm sure each bank had different reasons for stopping selling the Iraqi Dinar, however from talking to differnet banks and bankers as well as common sense these are three major reasons that played into their decision to stop selling the Iraqi Dinar.
It's interesting Wells Fargo Bank actually has a video up on Youtube stating "We do not sell the Iraqi Dinar." I imagine they get so many calls inquiring and then asking why don't you, why did you stop, will you sell in the future, that they decided to just make a video to tell people were not dealing with it and have no plans to in the future.
One last thing I wanted to address. I often see questions online such as which banks sell Iraqi Dinar or Where can I buy Iraqi Dinar; so just wanted to address those questions quickly. As far as I know no major national banks such as Chase, Wells Fargo, PNC, etc are selling the Iraqi Dinar. I have heard reports from people online that some smaller local banks and credit unions can still get the Iraqi Dinar. Generally though the only place to buy Iraqi Dinar is either on Ebay or from one of the online Dinar dealers.