Gaza’s Economic Recovery: Potential New Virtual Currency
Officials from the US-led Peace Commission, which is overseeing Gaza’s reconstruction following the conflict, are reportedly exploring the idea of introducing a virtual currency to help boost the region’s economic recovery.
This proposed currency would be a “stablecoin,” designed to maintain a stable value by being linked to a reliable asset, like the US dollar. According to a report on Monday, which quotes several sources familiar with the initiative, this suggestion is still in its nascent stages.
The initiative is apparently being spearheaded by Lilan Tankman, an Israeli tech entrepreneur and former intelligence officer. He serves as a volunteer advisor to the peace committee and has collaborated with senior US officials on various Gaza-related projects over the past year.
Additional contributors include members from the National Committee for the Administration of Gaza, a Palestinian scientific agency working with the Peace Commission, along with staff from the office of Nikolai Mladenov, a former UN official currently involved with the committee.
It appears that discussions surrounding the stablecoin, which would be pegged to the US dollar, are still at an early stage, with many specifics yet to be finalized.
One insider emphasized that this isn’t about establishing a new currency specifically for Gaza, but rather a means for Gazans to conduct transactions digitally.
Currently, many in Gaza rely on the Israeli shekel, but this is in limited supply due to the economic downturn triggered by the war. Following the onset of hostilities on October 7, 2023, Israel restricted cash flow into the region to undermine Hamas’s financial capabilities.
Alongside that, numerous affluent families in Gaza withdrew their funds from banks and left when the conflict escalated. This has led foreign businesses operating in the area to insist on cash payments due to growing concerns about Gaza’s financial stability.
As a result, financial institutions in Gaza are facing significant challenges, and those who do have access to shekels often face high fees for using the currency. The idea behind the new digital currency, as stated by sources, is to mitigate these issues.
Another source mentioned that the initiative aims to cut down on cash flow within Gaza to reduce Hamas’s ability to fund its activities.
Officials involved in the project have clarified that there is no intention of creating a divide between Palestinians in Gaza and those in the West Bank, where shekels are also utilized.
A potential hurdle to the implementation of this stablecoin could be the current state of Gaza’s mobile network, which is limited to low-speed 2G service due to Israeli restrictions. However, Tankman stated during a recent peace committee meeting that plans are in place to upgrade the network to offer high-speed access by July.
The Peace Commission, along with its various agencies, was established as part of a US initiative regarding Gaza. The initiative is currently in its second phase, although key elements, such as the disarmament of Hamas, remain to be carried out alongside a gradual withdrawal of Israeli Defense Forces from the area.
