Turning to Crypto: China, Iran, and Now Palestine?
Palestine Looking to Phase Out Use of Israeli Shekel Through Crypto
States across the world are turning to crypto as Bitcoin has embarked on a jaw-dropping recovery and Libra has been unveiled to the world.
Reported by Al-Monitor on July 22nd, Palestinian Prime Minister Mohammad Shtayyeh is looking into launching a cryptocurrency that would be used as an alternative to the Israeli Shekel. Shtayyeh’s idea is to prevent Israel from blocking transactions, which ties in with the conflict between the two groups. He told a local television outlet that Palestine’s economy wants to start to phase out its reliance on the Shekel.
If launched, this digital Palestinian dollar may go against a protocol the state signed in 1994. The Palestinian Monetary Authority has the power of a central bank, but can not issue banknotes. Presumably, a crypto asset launched by the PMA would be classified as some sort of banknote.
Iran May Launch Gold-Backed Digital Asset
Palestine’s sudden idea to launch a cryptocurrency comes as Iran, a country recently revealed to have a rapidly growing Bitcoin mining economy, has purportedly begun research on and development of a gold-backed cryptocurrency. Per Asia Crypto Today, which cited an unlinked report from the local Tehran News outlet, the embattled nation has been approved by its central bank to launch the cryptocurrency. CEO of Iranian Information and Communication Technology (ICT) FANAP, Shahab Javanmardi was reported as saying:
“IRAN’S CRYPTOCURRENCY WILL BE SUPPORTED BY GOLD, BUT ITS FUNCTION IS SIMILAR TO OTHER CRYPTOCURRENCIES. THE CRYPTO ASSET IS DESIGNED TO MAXIMIZE THE USE OF IRANIAN FROZEN BANK ASSETS.”
This crypto project could result in harsher regulation on the Bitcoin space from the U.S. government, who have historically been heavy-handed against Iran and cryptocurrencies.
A Digital Yuan
Palestine’s and Iran’s efforts come hot on the heel of a report from the South China Morning Post. In the article, the head of the research division at the People’s Bank of China, Wang Xin, told an audience at the Peking University that Facebook’s Libra could affect international fiscal stability, and thus the Yuan.
What Wang is fearful of is that the cryptocurrency will be mostly backed by the United States Dollar but will be available the world over, giving the U.S. even more influence over politics and finance than it already has.
The proposed digitization of the Yuan, which is arguably already well on its way through WeChat Pay (literally 90% of stores and services accept this payment medium in urban areas), would theoretically give China a chance to combat the growth of Libra. But whether or not a Yuan “cryptocurrency” succeeds in the real world isn’t clear.