- Prime Minister Mohammed Shtayyeh wants to use cryptocurrencies to attain financial freedom for Palestine and discard the Israeli Shekel
- The PMA had previously pitched the idea of launching a digital currency back in 2017
Palestine is on its way to using cryptocurrency instead of the Israeli shekel fiat currency, Palestinian Minister Mohammad Shtayyeh recently confirmed, according to reports by local English media Al-monitor. The new government wants to use cryptocurrencies to achieve the long-time target of enhancing the freedom of the Palestinians by detaching themselves from the shackles of Israel and its currency.
With harsh sanctions, crypto offers Palestine new possibilities
Prime Minister Mohammed Shtayyeh established that fact that his government has plans to overcome the various economic hurdles imposed by Israel by using cryptocurrencies a the state economy. He said that he’ll be considering every possible way to improve the Palestinian economy and keep it free from Israeli obtrusion. During his first appearance on Palestine TV after taking over his office as Prime Minister, he had said that:
“The Palestinian economy has about 25 billion shekels [$7 billion] circulating in the local economy, but we’re not forced to remain dependent on the shekel.”
The Al-Monitor report further explains that the Paris Protocol signed by Israel and Palestinian Liberation Organization, empowers the Palestinian Monetary Authority (PMA) with the powers of a central bank, without the benefit of being able to issue banknotes. The protocol stated that the Israeli Shekel would be used “as a means of payment for all purposes including official transactions”. This made the Israeli Shekel the main circulating currency in the Palestinian market alongside the US dollar and the Jordanian dinar.
Still a long way to go before the digital revolution
The PMA had previously pitched the idea of launching a digital currency back in 2017. They had hoped to get a working model within the next five years but it is not an easy task. The idea might sound too good for the ears but it is not very easy to get everybody on board with this. One such example would be Najah University economics and social science professor Bakr Shtayyeh who told Al-Monitor:
“If Palestine has its own currency, will it be able to prevent Israel from withholding tax clearance funds or controlling crossings and the movement of exports and imports? Will Palestine be able to conclude direct commercial deals with neighboring countries without the imported or exported goods passing through Israeli commercial ports? The problem of the Palestinian economy is not the currency but rather a complex economic and political reliance on Israel.”
He pointed out that 170,000 Palestinians earn their salaries in fiat currencies i.e; the Israeli Shekel. He mentions the fact that 80% of transactions in Palestine are done via Shekels and it would quite a difficult task to move from this to a whole new monetary system.
Palestine not alone
Palestine is not the first country that is considering cryptocurrency as a fix for their tumbling economy. Countries like Iran, Cuba, Venezuela and even the people of Zimbabwe are all slowly trying to shift towards a digital economy. The security issues arising around cryptourrencies and governments trying to centralize something whose main feature of attraction is decentralization is something that is slowing down the mainstream adoption of cryptocurrencies. Governments are however considering the use of blockchain and distributed ledger technology, which is very good news for crypto.