Palestine: Cryptocurrency Will Bring Economic Freedom

The Palestinian Authority stated in a recent public statement that developing a sovereign cryptocurrency will reduce Palestine's reliance on the Israeli legal tender, the shekel.

On July 9th, Palestinian Prime Minister Mohammad Shtayyeh announced that the government will use cryptocurrency to circumvent sanctions imposed by Israel. He reiterated his commitment to seeking alternative currencies when he first took office on April 13th.

He further stated:

The Palestinian economy circulates approximately 25 billion shekels, about 7 billion US dollars, in the local economy, but we are not compelled to continue relying on the shekel.

Shtayyeh pledged to consider all options and make every effort to find an economic freedom path that Israel cannot block. The Paris Protocol of 1994 granted the Palestinian Monetary Authority (PMA) the power of a central bank, but the government does not have the authority to issue banknotes.

The report pointed out that the protocol, signed in 1994 by the Palestinian Liberation Organization and Israel, declared that the shekel would be used as the sole means of payment, including for official transactions.

Professor Bakr Shtayyeh from Najah University's Economics and Social Sciences department expressed doubts and questioned whether cryptocurrencies could effectively reduce Palestine's dependence on Israel. He noted:

The problem is not money, but the complex economic and political dependence of Palestine on Israel. 170,000 Palestinians work in Israel and earn shekels, and 80% of trade with Israel is conducted in shekels.

Shtayyeh further explained that in reality, Israel would bypass Palestinian cryptocurrency, and nations relying on the shekel would "remain unchanged."

Economic professor Mazen al-Agha from the Palestinian Planning Center reminded that security is another issue to consider.

Compared to Palestine, Israel has highly advanced cybersecurity, network attack capabilities, and software development infrastructure. Even if digital currency development is completed, it could be vulnerable to external cyber attacks.

In fact, Palestine is not the first country to consider using cryptocurrency to overcome oppressive governments or international sanctions. According to previous reports from ABM, Iran, Cuba, Zimbabwe, and Venezuela have also been rumored this year to consider using cryptocurrency as a national currency.

Further Reading

• Indian Finance Minister: India has not officially banned cryptocurrency
• Can Libra change Cuba? Overview of the cryptocurrency industry in Cuba

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