Donald Trump's peace committee is looking into the possibility of introducing stablecoins in the Gaza Strip to address the severe cash shortages exacerbated by Israeli blockades. As reported by the Financial Times, the committee aims to help rebuild the devastated economy of Gaza with a stablecoin system that could be pegged to the US dollar. This initiative is seen not as a new currency for Palestinians but as a tool for digital transactions to alleviate the cash crisis that has intensified since the outbreak of war in 2023.

The introduction of stablecoins comes amidst a backdrop where the official currency in Palestinian territories, the Israeli shekel, has become virtually inaccessible in Gaza due to restrictions on its inflow. Most ATMs have been destroyed or rendered inoperative, forcing residents to rely on remittances from outside the territory, often incurring high fees to convert these funds into cash. This increasing reliance on cash, coupled with the long-term crisis, has led to a surge in digital payment systems and even the emergence of technicians who repair defaced currency, reflecting the extreme measures the residents are taking to navigate the financial hardships.

Moreover, the move to utilize stablecoins is also tied to the geopolitical landscape, with intentions to cut off funding sources for Hamas by making cash transactions less viable. However, concerns have been raised regarding the potential economic separation between Gaza and the West Bank if the stablecoin is not regulated by the Palestinian Monetary Authority. There are fears that an unregulated stablecoin might further complicate the already intricate economic relations within the Palestinian territories, especially in the context of future statehood aspirations.