In a groundbreaking policy proposal, the Trump administration is reportedly exploring the creation of a U.S. dollar-pegged stablecoin to facilitate economic reconstruction in the Gaza Strip. According to multiple sources familiar with the matter, this cryptocurrency-based solution is being considered as part of broader plans to revitalize Gaza's economy, which has been devastated following the Israel-Hamas war that began in 2023.
The initiative is being developed under the umbrella of the "Peace Board," a U.S.-established body for Gaza's reconstruction, led by Israeli technology entrepreneur Liran Tancman, who serves as a volunteer advisor. The 14-member National Committee for the Governing of Gaza (NCAG) and the High Representative’s Office, led by former UN representative Nickolay Mladenov, are also involved. The plan is still in its early stages, with many implementation details yet to be finalized.
The proposed stablecoin is not intended to be a "Gaza Coin" or a new Palestinian currency, but rather a digital tool to enable transactions in a region where traditional banking and payment systems have collapsed. Tancman stated at a recent board meeting in Washington that work is underway to build a "secure digital backbone" for Gaza, encompassing e-payments, financial services, distance learning, and healthcare.
The economic context makes this proposal particularly significant. The Palestinian Monetary Authority (PMA) lacks the authority to issue its own currency, and the Israeli shekel serves as the official currency in Palestinian territories. However, post-war conditions have severely restricted access to physical cash shekels due to destroyed ATMs and Israel's blockade on new cash inflows. This has led to high commissions from cash distributors and increased reliance on electronic payment systems.
Proponents argue that a blockchain-based stablecoin could offer several advantages: asset-backed stability (each coin redeemable for one U.S. dollar), transparent ledger for verifiable transactions, efficient settlement without banking delays, and financial inclusion through mobile-accessible digital wallets. The system aims to streamline reconstruction funding, contractor payments, and support for local businesses while providing unprecedented transparency to prevent fund diversion or corruption.
However, significant challenges remain. Experts warn about cybersecurity threats, the need for reliable internet and electricity infrastructure in a territory with frequent power outages, and the technological learning curve for a population in crisis. There are also concerns that a Gaza-specific stablecoin could weaken economic ties with the West Bank, potentially making Gaza a more "closed economy"—though project proponents deny any intention to create economic separation.
The political and regulatory landscape presents additional hurdles. The Board of Peace must navigate international regulations, sanctions regimes, and policies involving Israel, the Palestinian Authority, and Egypt. The U.S. regulatory environment for stablecoins remains uncertain, requiring potential compliance with SEC and FinCEN regulations. The White House and U.S. State Department have not commented on the proposal.
If implemented, this would represent one of the most ambitious applications of cryptocurrency technology in a post-conflict reconstruction scenario, potentially setting a precedent for future humanitarian and development finance initiatives worldwide.
