Monetary Authority of Palestine Considers Cryptocurrency a Political Gesture

The analysts point out that the political and general economic conditions of the territories occupied by Israel do not permit a digital currency to be utilized as a means of exchange. The Governor of PMA (Palestinian Monetary Authority), Feras Milhem, has disclosed that the idea of launching a Palestinian digital currency is being explored by the proto-central bank which does not launch a local currency and work under extremely restrictive economic and political conditions.

The director of the Palestine Economic Policy Research Institute, Raja Khalidi, informed Bloomberg that the favorable conditions for the issuance of a Palestinian currency, whether it is paper-based or digital, do not exist in the current macroeconomic scenario of the country.

It has been argued by Khalidi that a political signal for monetary autonomy may be conveyed to Israel if the launch of the digital currency takes place. The ex-senior advisor to the Governor of the Bank of Israel, Barry Topf, reverberated the same point of view as Khalidi by insisting that the dollar, dinar, or shekel are not going to be replaced by any of the digital currencies to be issued by Palestine. He further stated that digital currency is neither going to be an entity of accounting nor a store of value.

The centrally launched digital currency does not probably seem to be placed in the occupied territories of Gaza and the West Bank. The latter has been inflicted with a 14-years closure that has led the economy of the territory to a near collapse and harsh Israeli restrictions have been implemented on it along with the four wars fought since 2008.

Gaza comes under the administration of PA (Palestinian Authority) in which only 40% territory of West Bank is included in the matter of the power of the government without any military. The jurisdiction of PA is different from the PMA as the former extends to the West Bank and Gaza’s areas which are under the complete control of Israel. The Prime Minister of Palestine, Mohammad Shtayyeh Raif, stated in 2019 that in an attempt to secure the country’s economy from being politically threatened and restricted by Israel he would prefer the utilization of digital currency as another monetary system in the place of the shekel.

It has been discussed by the analysts that the actual issue faced by the economy of Palestine is not due to the currency rather it owes to the complex political and economic dependency of Palestine on Israel.