Cryptocurrency for Gaza under US-Israeli supervision: A reconstruction plan or a tool to tighten the financial blockade?

International press reports have revealed moves led by the Peace Council, linked to US President Donald Trump, to introduce a new financial system in the Gaza Strip based on stable cryptocurrencies. This step comes amidst the near-complete collapse of the traditional banking system as a result of the ongoing Israeli war for more than two years, which has prompted international parties to search for digital alternatives to manage daily transactions.

This trend is led by Israeli businessman and former reserve officer Liran Tankman, who serves as a volunteer advisor to the Peace Council, where he promotes the idea of a stablecoin as a means to facilitate payments. The project, according to its proponents, aims to find a way out of the suffocating economic crisis and severe liquidity shortage suffered by the residents of the Strip due to restrictions on money movement.

A stablecoin is defined as a digital asset linked to the value of a traditional currency such as the US dollar, which protects it from the sharp fluctuations experienced by other cryptocurrencies like Bitcoin. These currencies are issued by companies that maintain parallel cash reserves, allowing users to conduct transactions through digital wallets on mobile phones without the need to open complex bank accounts.

Informed sources reported that discussions are still in their initial stages, but they involve multiple parties, including the National Committee for the Administration of the Gaza Strip and the office of High Representative Nikolay Mladenov. This currency is expected to be supported by Palestinian and Gulf technology companies with expertise in financial technology, to ensure its reach to the widest possible segment of the population.

Economic experts believe that this proposal carries objectives beyond the humanitarian or economic aspects, as it is feared that it could be a means to deepen the separation between the Gaza Strip and the West Bank. The Palestinian Authority in Ramallah will not have any supervisory or administrative authority over this new financial system, thus cementing an independent political and economic reality for the Strip under external supervision.

Economic analyst Zayan Zawana points out that Israel seeks to employ financial technology as a sophisticated espionage tool to monitor all details of life and financial flows in Gaza. Zawana believes that the intelligence failure in the events of October 7 pushed the occupation to search for technical means that guarantee real-time monitoring of every penny entering or leaving the Strip.

On the other hand, observers believe that the US administration may use Gaza as a laboratory for new monetary and technological experiments without any direct political or financial cost. The success of the stablecoin experiment in a complex environment like Gaza could pave the way for the adoption of similar policies in other parts of the world, or even within the United States itself to counter the decline in confidence in government bonds.

The issue of 'drying up the sources of resistance funding' tops the list of unannounced objectives of this project, as digital control aims to prevent Hamas from using cash liquidity. The parties overseeing the project hope that a complete digital transformation will lead to tracking all financial transactions and banning any wallets suspected of being linked to Palestinian factions.

Euro-Med Human Rights Monitor warned of the danger of this trend, describing digital wallets controlled by parties loyal to the occupation as potentially becoming 'silent weapons of extermination'. The monitor explained that depriving residents of cash liquidity and forcing them into a digital system that can be shut down with the click of a button represents a serious threat to the food and livelihood security of Palestinians.

Despite these plans, analysts doubt the stablecoin's ability to achieve its security objectives, noting that the resistance has proven its ability to circumvent financial restrictions for many years. American reports had stated that resistance factions received tens of millions of dollars through independent encrypted wallets, away from traditional international oversight.

1. The idea of a digital currency in Gaza faces huge structural obstacles, most notably the systematic destruction of power stations and communication and internet networks by the occupation army. Without a stable energy and communication infrastructure, the idea of complete reliance on digital wallets and cryptocurrencies remains mere technical ambitions that are difficult to implement in the tragic reality.

Sources confirm that the regulatory framework for the proposed currency is not yet complete, and there are technical and legal disagreements about how to ensure its stability and secure it from cyberattacks. However, the American and Israeli insistence on pushing this project indicates a desire to change the economic rules of the game in Gaza as part of post-war arrangements.

The question remains about the position of the Palestinian street and local companies on engaging in a financial system led by a former Israeli officer and managed by external parties. Trust in the financial system is the cornerstone of any currency, and in the absence of national sovereignty, the project may face widespread popular rejection that hinders its political and security objectives.

The shift towards 'Digital Gaza' under international supervision represents a new chapter in the conflict, where major powers seek to use technology as an alternative tool to traditional weapons. While some promote the project as a solution to the humanitarian crisis, many in Gaza see it as a new link in the chain of blockade aimed at suffocating the resistance and tightening control over citizens' livelihoods.

Digital wallets under this proposed system could turn into silent weapons of mass destruction by stripping Gaza of its financial sovereignty.