President Trump’s Board of Peace is exploring a dollar-backed stablecoin for Gaza to rebuild the war-damaged economy, with Israeli tech entrepreneur Liran Tancman leading the effort as critics warn it could economically separate Gaza from the West Bank.
The Stablecoin Proposal
The Financial Times reported that proposal would not create a new Palestinian currency.
Instead, it would function as a digital payments mechanism in a region where banking infrastructure has been severely disrupted and access to physical Israeli shekels has been constrained since the 2023 war.
The stablecoin would be pegged to the U.S. dollar, with Gulf Arab and Palestinian digital asset firms potentially supporting implementation.
At last week’s Board of Peace meeting in Washington, Tancman stated work was underway to build a “secure digital backbone” for Gaza, encompassing e-payments, financial services, distance learning, and healthcare.
The Case For Digital Payments
Following the 2023 war, access to cash shekels was severely restricted.
The physical money supply decreased due to destroyed or closed ATMs and Israel blocking new cash inflows into the region.
Supporters argue that expanding digital payments could reduce reliance on scarce physical cash and limit revenue channels for Hamas.
With banking infrastructure destroyed, a dollar-pegged stablecoin offers a functioning payment system without requiring physical currency.
The regulatory framework and access conditions will be determined by the Board of Peace and Gaza’s National Committee for the Governing of Gaza, though a finalized model hasn’t been established.
The Economic Separation Concern
Critics warn that a Gaza-focused stablecoin could further separate the enclave’s economy from the West Bank.
Economic integration between the two regions is considered critical for Palestinians’ future statehood. Separating payment systems could make Gaza a more “closed economy.”
Additionally, governance concerns emerge given Gaza’s power outages and reliance on 2G networks.
Operating a digital payment system requires reliable electricity and internet connectivity—both currently unstable in Gaza.
Those close to the project maintain there’s no intention of separation and that the aim is simply to increase digital transaction capacity.
The EU Meeting
EU foreign policy chief Kaja Kallas and foreign ministers met Monday with Board of Peace director Nikolay Mladenov in Brussels.
The EU plays a crucial oversight role at Gaza’s Rafah border crossing with Egypt and is the top donor to the Palestinian Authority.
The question of whether to work with Trump’s board has split European capitals.
EU members Hungary and Bulgaria are full members, while 12 other EU nations sent observers to the inaugural Washington meeting.
French President Emmanuel Macron and European Commission President Ursula von der Leyen declined to join.
Image: Shutterstock
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