The Palestinian Monetary Authority, Palestine’s central bank, is looking into the development of a digital currency, according to a report from Bloomberg on Thursday.
Feras Milhem, the governor of the Palestinian Monetary Authority, told Bloomberg Television that two studies on cryptocurrencies are being done with the hope to eventually use digital currency for domestic and international payments.
Palestine has not had an independent currency for 70 years, and the Palestinian economy primarily relies on the Israeli shekel for day-to-day transactions, with the Jordanian dinar and U.S. dollar acting as stores of value.
Palestine’s consideration of a central bank digital currency (CBDC) puts it in league with other major geopolitical players including China and Sweden that have begun rolling out CBDCs.
However, regional economic analysts have expressed hesitation about the feasibility of a Palestinian digital curency.
“The macroeconomic conditions don’t exist to allow a Palestinian currency – digital or otherwise – to exist as a means of exchange,” Raja Khalidi, director of the Palestine Economic Policy Research Institute, told Bloomberg.
The Palestinian Monetary Authority’s push to develop a digital currency is likely impacted by Palestine’s dire economic situation.
Israeli anti-money laundering laws have left Palestinian banks with an abundance of shekels, and limitations on how many shekels the banks can transfer back to Israel per month have combined to create an untenable financial situation for many.