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Palestinians Eye Bitcoin as Alternative Currency as Country Lacks Monetary System

Palestinians Eye Bitcoin as Alternative Currency as Country Lacks Monetary System

Palestinians Eye Bitcoin as Alternative Currency as Country Lacks Monetary System

Palestinians, who have no legal tender and currency, have been relying on other reserve currencies such as the euro, US dollar, Israeli shekel and Jordanian dinar to finance day-to-day operations. Earlier this week, Azzam Shawwa, the head of the Palestine Monetary Authority (PMA), stated that PMA officials are exploring a bitcoin-like digital currency to provide its people with an independent currency.

After the annual meeting in Cyprus of the European Bank for Reconstruction and Development, Shawwa told Reuters that PMA is actively investigating into the possibility of issuing the Palestinian pound.

However, the issuance and manufacturing of fiat money requires inefficient and complicated processes that would require PMA to collaborate with the Israeli government and secure a clearance. Instead, Shawwa introduced the concept of a bitcoin-derived digital currency.

Emphasizing PMA’s long-term strategy to become a modern central bank for an independent Palestine, Shawwa stated:

"That is something we would like to see. It will be called the Palestinian pound. If we print currency, to get it into the country you would always need clearance from the Israelis and that could be an obstacle. So that is why we don't want to go into it."

PMA and Palestine aren’t alone in the pursuit of a bitcoin-like blockchain-based digital currency. Most notably, China’s Royal Chinese Mint, the subordinate unit of China Banknote Printing and Minting, the organization in charge of electronic banking and research of digital money, is currently exploring with Ethereum, a smart contract protocol developed for decentralized applications, to digitize the RMB.

Consensus Systems (ConsenSys) head of global business development Andrew Keys wrote in a blog post:

“The Royal Chinese Mint is the subordinate unit of China Banknote Printing and Minting, which is responsible for the electronic banking mission of China Bank, concentrating on the research and exploration of the forefront of digital money, taking part widely in innovation and practice in the fields such as digital currency, mobile finance, smart-city construction and Internet based finance; it also actively promotes the application of blockchain technology in finance and related fields. The Royal Chinese Mint is experimenting with the ERC 20 token standard and Ethereum smart contracts to digitize the RMB.”

One clear aspect of PMA’s pursuit of a blockchain-based digital currency is that it will become the backbone of the Palestine economy.

"But it's not only the currency, you have to see the economy also. Issuing (a currency) is something, but you also need the backbone of the currency; reserves, gold, oil and that is part of the business plan,” said Shawwa.

In the meantime, it is entirely possible that bitcoin become the alternative currency for local residents. Because Palestinians still don’t have a single currency to rely on to finance day-to-day operations, they could migrate to a more reliable and dependant financial network in bitcoin in the near future.

Author : Joseph Young

Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

bitcoin bitcoin technology Digital Currency Palestine Monetary Authority