Palestine Monetary Authority mulls digital currency

A digital currency for Palestine would strike at least a symbolic blow for monetary independence from Israel.

The Palestinian Monetary Authority is studying the possible issuance of a digital currency, a move that would allow it to strike at least a symbolic blow for monetary independence from Israel. Under their 1990s accords with Israel, the Palestinians agreed not to immediately create their own currency, and their economy primarily uses the Israeli shekel, along with the Jordanian dinar and U.S. dollar. Palestinian banks are currently awash in shekels because of an Israeli law prohibiting large cash transactions, meant to crack down on money laundering. Israel also limits how many shekels Palestinian banks can transfer back into Israel monthly. As a result, they sometimes have to borrow to cover foreign exchange payments to third parties, and are stuck with a glut of Israeli banknotes. That could be one reason a digital currency would be attractive to the Palestinian monetary system.