Following Israel’s recent tests of a digital shekel, the Palestinian Monetary Authority is planning to launch its own (CBDC) central bank digital currency, consistent with a Bloomberg report. Introducing of digital currency by Palestine is a good sign for the crypto market. This act can motivate other countries to adopt and use blockchain technology to launch (CBDC) central bank digital currency.
- Bound by 1990s accords with Israel, Palestine doesn't have a currency of its own. Instead, the Israeli shekel is the de facto currency, alongside the Jordanian dinar and therefore the U.S. dollar.
- The governor of the Palestine Monetary Authority told Bloomberg Television that two feasibility studies on the thought of a Palestinian CBDC were underway, with the goal of employing a future digital currency “for payment systems in our country and hopefully with Israel et al..”
- Palestinian banks are prohibited from making large cross-border cash transfers — including to Israel — and are often forced to borrow money to hide remittances. it's hoped that a Palestinian CBDC may address that issue.
- Experts, however, doubt the feasibility of a Palestinian CBDC, citing the inherently weak local economy, Israel’s blockade of free flows of products and other people, and therefore the Palestinian Authority’s heavy reliance on remittances and foreign donor money.
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