US President Donald Trump is reportedly coordinating efforts with Israeli officials and tech specialists to explore a stablecoin for the embattled region of Gaza. This recent development will be part of the broader objective of the Trump-led multinational organization, the Board of Peace (BoP), which seeks to restore peace and civility not only in Gaza but also globally.
For nearly four decades now, Gaza has been the central arena for the Israel-Iran war on regional dominance. In 2023, the conflict became a full-blown missile war, with fatalities on both sides exceeding 70,000.
Consequently, Gaza’s access to Israel’s official currency, the shekel, diminished, while its banking systems collapsed. Gaza occupants now suffer from shortages in food, water, shelter, and medical supplies.
In a pledge towards Gaza’s reconstruction, BoP member states have contributed roughly $17 billion, with the bulk of it ($10 billion) from the US. Part of these funds will be directed toward the Gaza stablecoin, which would function as a digital currency and an alternative means of payment for Gaza citizens.
According to the Financial Times, Israeli developer Liran Tancman will lead the development of the stablecoin. Several Israeli officials will participate in advancing the stablecoin, with Palestinian and Gulf Arab cryptocurrency firms promoting its adoption.
The development would mark yet another lean toward cryptocurrencies as an alternative means of payment for war-ravaged economies, with Ukraine and Iran already showing heightened adoption.
Supporters of the stablecoin note that it would create a digital payments system, which would be a much-needed alternative to solid cash. The coin would also limit financial access to the terrorist labeled Hamas group.
On the other hand, critics note that developing a stablecoin specifically for Gaza would further isolate it from the West Bank’s economy and governance. Others note that the benefits would be minimal, since Gaza suffers frequent power outages and remains dependent on slow 2G networks. Recently, the Trump-backed stablecoin USD1 temporarily depegged from the dollar by 0.6%, raising uncertainty over Trump’s engagement with yet another stablecoin.
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