Bitcoin is currently serving an important role in Gaza to help investors gain access to markets abroad and send money overseas.
Currently, Palestinians are unable to get their Israeli shekels or other currencies used in the area, such US dollars or Jordanian dinars, to online exchanges as they don’t work with local banks. This has given rise to many unofficial exchanges around the city.
The territories of Gaza and the West Bank are separated from each other by Israeli territory. Both fell under the jurisdiction of the Palestinian Authority but Gaza has since June 2007 been governed by Hamas, a Palestinian Islamic organization which came to power in free elections in 2006. It has been placed under an Israeli and US-led international economic and political boycott from that time onwards.
There are reportedly now 20 unaccredited exchanges helping local cryptocurrency users to get their money abroad to make investments that otherwise they would have no chance of making in the region. In Gaza, Mohammed runs his own unofficial crypto exchange and suggests that over the course of four years, he’s enabled up to 50 Palestinian families to buy an average of USD 500 worth of Bitcoin a month to use abroad or shop online. He maintains that his clients view Bitcoin as “cheaper, safer, and quicker”, maintaining that “nothing works with Palestinian banks” and that “Bitcoin wallets are alternative banks”.
Palestinians have adopted peer-to-peer payments are seen as another way of getting around local restrictions. Palestinians are under enormous pressure in Gaza and, due to Israel’s world status, international pressure often means that those sending money from the West have been known to have their accounts closed.
Laith Kassis, CEO of Techno Park on the West Bank, illustrated the problem for many wishing to get money overseas: “There is no payment gateway, like PayPal, for entrepreneurs to receive payments internationally… So here come solutions on blockchain with private nodes.”
The lack of power is another local issue that Palestinians struggle with as frequent outages equates to no access to the internet, making any kind of transfer of funds next to impossible.
However, Bitcoin enthusiast and professor of economics at the Lebanese American University, Saifdean Ammous doesn’t see Bitcoin or crypto in general as a solution to the failing Palestinian economy. He argues:
“If the people who want to do the transaction don’t both have balances in Bitcoin then you’re just adding extra layers of conversion from their home currency to Bitcoin and back to the home currency… That’s never going to be a sustainable solution.”
The World Bank estimates that 20% of Palestinians live below the poverty line of less than USD 5.50 a day. In this volatile highly-controlled environment, cash is the most highly sought-after payment for day-to-day necessities.
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