Palestinian Government Eyes Cryptocurrency as Alternative to Shekel

Challenging the Status Quo

In a bold move, Palestinian Prime Minister Mohammad Shtayyeh recently announced that his government is exploring the potential use of cryptocurrency. This consideration comes as a response to the economic constraints imposed by reliance on the Israeli shekel, as reported by Al-Monitor.

The Economic Landscape

During a speech at the opening of the Palestine Center for Computer Emergency Response, Shtayyeh emphasized that he is open to any alternative that could bolster the Palestinian economy, stating:
“The Palestinian economy has about 25 billion shekels circulating in the local economy, but we’re not forced to remain dependent on the shekel.”
With the current shekel circulation valued at around $7 billion, the reliance on this fiat currency is under scrutiny.

Historical Context and Challenges

The roots of this dependence can be traced back to the Paris protocol signed in 1994, which established that the Israeli shekel would serve as the primary currency. While the Palestinian Monetary Authority was granted some central banking powers, the inability to issue currency leaves the Palestinian economy vulnerable.

Expert Opinions

Professors and economists are weighing in, with an expert from Najah University reflecting on the real heart of the matter. They assert that merely introducing a cryptocurrency won’t address the fundamental issues of economic reliance on Israel. Key points made include:

• 170,000 Palestinians earn salaries in shekels, creating a deep-rooted connection to the currency.
• 80% of transactions in the broader market occur in shekels.
• Israel’s likely reluctance to accept transactions in a foreign or new currency presents significant hurdles.

The Tides of Change

In 2017, Palestine had already shown interest in developing a national cryptocurrency. This recent announcement reopens the discussion about a financial revolution that could empower Palestinian autonomy. But will this new currency become the knight in shining armor, or merely another piece of the puzzle?

Looking Ahead

As the Palestinian government navigates this complex landscape, the shift towards cryptocurrency could symbolize a resistance against economic control. Only time will tell if they can ride the waves of change or find themselves adrift in a sea of financial uncertainty.