Palestinian Authority wants to issue a sovereign crypto-currency to reduce country’s reliance on Israeli shekel.
Since the 1994 Paris Protocol, the Palestinian Monetary Authority (PMA) possesses the power of a Central Bank. But the government was unable to issue banknotes and it was agreed that the Shekel would be the main mean of transactions.. Therefore, Shtayyeh, the Palestinian Prime Minister said he would consider any option to free Palestine’s economy from Israel’s influence. He thinks crypto-currencies could be the answer to this situation.
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.
Said Shtayyeh, on Palestine TV.
Palestinian Authority wants to use a crypto-currency to gain back a little bit of power over Israel local economic domination. A sovereign digital asset, to bypass sanctions.
It was in 2017 that the idea was first mentioned by the PMA. It was expected to be launched within 5 years. Not everyone agreed with the idea though. But will a crypto-currency separates Palestine from relying on Israel? Bakr Shtayyeh professor at the Najah University economics and social science doesn’t seem to think so.
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.
Said Najah University economics and social science professor Bakr Shtayyeh.
The problem with the Palestinian economy is more complex and needs more than a simple change of currency. There are over 170 000 Palestinians working in Israel and earning Shekels and 80% of the trade transactions realized with Israel are in Shekel. Also in such a difficult and singular political situation, which countries would agree to trade with Palestine. That would involve violating international rules. The reality is that digital currency or not, the Shekel is far from threatened. Palestine would be better off trading with neighboring countries and reducing its trade with Israel.
Compared to Palestine, Israel is already highly advanced technologically and a crypto-currency could be easily neutralized. Also this situation raises a question of the changes that can be brought by the adoption of a crypto-currency in a country. It is not the first time that we see a nation considering the creation of a crypto-currency to avoid the influence or economic domination of another country.
We are thrilled to see how will crypto-currency be used in these kind of situations.