US President Donald Trump and peace committee officials are claimed to be considering the option of creating a dollar-pegged stablecoin for the region as part of his plan to rebuild the Gaza economy.
Cryptocurrency-based solutions are being considered to expand digital payments in the Gaza Strip, where economic infrastructure has largely collapsed following the Israel-Hamas war, five people familiar with the matter said.
The stablecoin plan is reportedly still in its early stages, and many details regarding its implementation are unknown. However, discussions suggest that a virtual currency pegged to a mainstream currency like the US dollar could boost economic activity in the Gaza Strip, where traditional banking and payment systems have been severely damaged. Officials close to the project said the planned structure is not a “Gazacoin” or a new Palestinian currency, but rather a tool designed to allow Gazans to transact digitally.
The effort is being carried out under the auspices of the Peace Committee established by the United States to rebuild Gaza, and is reportedly led by Israeli technology entrepreneur Lilan Tankman. Tankman is said to be serving as a volunteer advisor to the board. The 14-member National Committee for the Governing of Gaza (NCAG), the new Palestinian technocratic government in Gaza, and the Office of the High Representative, led by former United Nations representative Nikolai Mladenov, are also said to be involved in the project. Both organizations operate within the Peace Committee.
The regulatory framework and access conditions for the stablecoin will be determined by the Peace Commission and NCAG, the people said, but the final model has not yet been established. Tankman told a board meeting in Washington last week that work is underway to build a “secure digital backbone” for the Gaza Strip. This infrastructure includes electronic payments, financial services, distance learning, and healthcare. The White House and the US State Department did not respond to requests for comment on this story. The Trump administration is known to have previously supported widespread use of dollar-pegged stablecoins.
The Palestinian Monetary Authority (PMA), which acts as the central bank for Gaza and the West Bank, does not have the authority to issue its own currency. The Israeli shekel is used as the official currency of the Palestinian territories. Although dollar transactions exist in Gaza, the volume of transactions lags behind that of shekels. After the war that began in 2023, access to cash shekels was severely restricted. The destruction or closure of ATMs and Israel’s blocking of new cash flows into the region has reduced the physical supply of money. This situation has led cash merchants to charge high fees and the public to turn to electronic payment systems.
However, some officials have warned that Gaza’s unique stablecoin model could weaken its economic ties with the West Bank. Economic integration between the two regions is considered important for the Palestinians’ future statehood, but it has been argued that separating payment systems could make Gaza more of a “closed economy”. But those close to the project insist there is no such separation in mind, and that the aim is simply to increase digital transaction capabilities.
*This is not investment advice.
