Newspaper: 'Peace Council' Prepares Plan to Launch 'Digital Currency' for Gaza Aimed at Drying Up Hamas Funds

SadaNews Economy - Entities working with U.S. President Donald Trump as part of what is known as the "Peace Council" are considering the creation of a stable digital currency for the Gaza Strip, as part of efforts to reshape the devastated economy of the region, according to five individuals familiar with the discussions.

According to sources, the discussions are still in the preliminary stages, and many details regarding the mechanism for launching the currency or the regulatory framework governing it have yet to be finalized. A stablecoin is a type of cryptocurrency tied to the value of a traditional currency, such as the U.S. dollar, which limits its volatility.

The proposal comes as part of broader visions for the future of Gaza, which has seen its economic activity collapse during the ongoing Israeli war for the past two years, and its banking system and traditional payment methods have experienced widespread paralysis, according to the "Financial Times."

One insider stated that the proposed currency is likely to be linked to the U.S. dollar, with a focus on involving Gulf and Palestinian companies specialized in digital currencies to help implement the project. He clarified that the goal "is not to create a currency specific to Gaza or to introduce a new Palestinian currency, but to provide a means that enables the residents of the sector to conduct their transactions digitally."

The proposal is being led by Israeli tech entrepreneur Liran Tankman, a former reserve officer, who is currently an unpaid advisor to the "Peace Council," according to two insiders. Officials from the National Committee for the Management of Gaza (NCAG), composed of 14 members, are also participating in the discussions, along with the Office of the High Representative, led by former UN envoy Nikolai Mladenov, both of which are working under the umbrella of the Peace Council.

According to one source, the Peace Council and the National Committee for the Management of Gaza will determine the regulatory framework and mechanisms for accessing the currency, but "nothing is final yet."

During a meeting held in Washington last week, Tankman indicated that the committee is working on building "a secure digital infrastructure and an open platform that enables electronic payments, financial services, education, and health, while allowing users to control their data," without providing additional details.

"Drying Up Cash Liquidity in Gaza to Prevent Hamas from Generating Funds"

Another individual familiar with the discussions mentioned that one of the motivations behind the initiative is to "dry up cash liquidity in Gaza to prevent Hamas from generating funds." Conversely, some insiders believe that expanding the scope of digital transactions could allow business activities to continue away from restrictions related to Israeli policies.

However, other sources expressed concerns that the adoption of a stablecoin specific to Gaza could deepen the economic divide between it and the West Bank, which Palestinians aim to include in their future state, especially if the currency is not under the oversight of the Palestinian Monetary Authority.

One individual noted that the lack of easy payment methods between the two regions could make Gaza an "almost separate economy," considering that "this is a cause for concern." Yet, an insider on the project has denied any intention to separate Gaza from the West Bank, stressing that the goal "is limited to enabling Palestinians to transact digitally."

The proposal also faces technological challenges, as the Gaza Strip suffers from frequent power outages, and Israel has imposed restrictions on telecommunications networks for years, limiting the use of advanced communication technologies.