THE FUTURE OF BITCOIN IN PALESTINE
Bitcoin gives Palestinians a powerful avenue for peaceful protest, and the opportunity to find sovereignty among oppressive economic policies.
One day last week I spoke to a Bitcoin user inside the Gaza Strip.
He asked to remain anonymous and go by the name Uqab — the Arabic word for “eagle” — as he took a large personal risk to talk to me.
We spoke on Telegram and had to time our call, as Uqab only has a few hours of electricity per day. For him, our chat was in the middle of the night. A Palestinian friend helped translate the call live. As we spoke, it was hard to fathom what life was like on the other end of the line.
Uqab was talking to us from Rafah, a city in the southern part of Gaza, a war zone only a few weeks removed from being heavily bombed by the Israeli military. I felt like I was speaking to someone from a different planet.
XI: THE FUTURE OF BITCOIN IN PALESTINE
A few weeks ago, the Israeli government publicly announced the seizing of bitcoin funds connected to Hamas. It seems certain that the IDF will begin to demonize Bitcoin as a tool of terrorists and perhaps, make it harder for Israelis and Palestinians to use.
Given that the Israeli government has prioritized centralizing as many economic flows as possible under its control into and out of Gaza and the West Bank, any money moving outside “official channels” will likely be deemed suspicious. This could be a deterrent to future adoption.
But already today, Paxful and LocalBitcoins have vibrant peer-to-peer marketplaces in Palestine. If Bitcoin could become adopted by hundreds of Palestinian businesses, and hundreds of thousands of individuals, then it could become a remarkably powerful peaceful protest.
There is a possibility here for Palestinians — or any vulnerable population, whether trapped by foreign occupation, domestic authoritarianism, a collapsing economy, or a structural lack of opportunity — to adopt Bitcoin as a new currency. Millions of individuals are already making this choice in Turkey, Argentina, Nigeria, Iran, Lebanon and beyond.
More than two-thirds of Palestinians are under the age of 30, and more than 70% have internet access. Young people are more comfortable with the idea of mobile money, and will be looking for technological solutions to their problems. It is a risk, but adopting Bitcoin as a circular economy could very well give Palestinians a leg up on their neighbors, and position them relatively well for the next century.
El Salvador has provided a national template of how Bitcoin can be used not just as a savings instrument to invest in the future, but also as a payment network that can allow citizens to connect with anyone in the world instantly.
Could Palestine be the El Salvador of the Middle East? President Nayyib Bukele is, after all, Palestinian.
Palestinians have not been able to mint their own cash — per the Paris Protocol — but even if they could, there’s no guaranteeing that the Palestinian Authority would not abuse its power and create massive inflation. Its track record on fiscal matters is poor. Topf might be right.
Moreover, the creation of a “Palestinian” currency (digital or otherwise) runs the risk of prolonging the power imbalances that exist today with the Palestinian economy. Would it provide financial “inclusion” — or global financial exclusion?
Even worse, transitioning the Palestinian economy to a digital one — whether it’s controlled by the PA, World Bank, Israel or anyone else — would be disastrous for the small amount of freedom that Palestinians do receive from cash and their informal economy, where they can save and transact outside of government control. A CBDC would enable greater blacklisting, confiscation and surveillance, no matter who is in charge of design.