Al-Shabaka Roundtable
May 2022
CRYPTOCURRENCIES AND PALESTINIAN RESISTANCE:
AN AL-SHABAKA DEBATE
By Tariq Dana and Ibrahim Shikaki
Overview
Contact@Al-Shabaka.org
The global rise of digital and cryptocurrencies has the
potential to dramatically reshape Palestinian political
and economic resistance inside and outside colonized
Palestine. How would this be possible, and how
viable would it be? Which technological aspects of
digital and cryptocurrencies can Palestinians deploy
in their struggle for liberation? What are some of
the complications they and their allies might face
in utilizing these technologies, and how can they
overcome them?
Al-Shabaka sat down with policy analysts Tariq Dana
and Ibrahim Shikaki to debate the utility and viability
of using digital and cryptocurrencies in the Palestinian
context.
Are digital and cryptocurrencies viable
as alternatives to a Palestinian national
currency?
Tariq Dana:
www.Al-Shabaka.org
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Cryptocurrencies were created as an alternative to
highly centralized, state-controlled financial systems
across the world. Decentralization is a keyword in
understanding the utility of cryptocurrencies, because
they are not controlled by any authority, including
governments or central banks. Transactions are
typically secured through algorithms and consensus
among complex networks of computers across the
globe. Cryptocurrencies also include other significant
features, such as anonymity, security, privacy, and fast
and unstoppable cross-border transactions. This means
that cryptocurrencies are immune to fraud and political
control.
I see many benefits to utilizing certain cryptocurrencies,
particularly Bitcoin, if adopted institutionally as part
of a Palestinian strategy. I use the term “strategy” to
refer to the long-awaited revival of the Palestinian
national movement, which necessarily requires
developing new economic and financial means of
resistance. This implies two things: first, we should
not adopt an incompatible statist perspective to solve
our problems. For example, it is not useful to think
about national currency in a conventional sense, but
rather, as an innovative financial approach to enhance
anti-colonial struggle. Second, we need to rethink
our traditional financial institutions and activities that
are fully subjected to Israeli control. Through using
decentralized cryptocurrencies, Palestinians can get
around these barriers.
Financial and technological literacy are important for
strategizing cryptocurrencies. Although cryptocurrency
markets have some flaws, such as volatility, speculation,
and scam, there are always ways to evade them.
The idea here is not to involve the Palestinians in
such market conditions. Rather, it is about how to
use cryptocurrencies to challenge Israeli financial
domination. For example, Palestinians can build
stablecoins designed specifically for Palestinian use and
cross-border payment, involving worldwide solidarity
networks and pro-Palestine businesses. Stablecoins
have fixed value, are built on blockchain technology,
and are central to Decentralized Finance (DeFi), a
revolutionary financial instrument that does not require
the involvement of a central authority.
Data about cryptocurrencies use suggest similarities
with the use of the internet in the 1990s, which was
only at 1% of the world’s population. Just as the
internet today is integral to people’s lives, it is expected
that mass adoption of cryptocurrencies will occur in
only a matter of time. The world’s ongoing economic
and financial crises may accelerate this process, and
Palestinians must be ready to join the global trend.
May 2022
Ibrahim Shikaki:
Cryptocurrencies are not a viable national currency,
not in Palestine nor anywhere else. First, we
should differentiate between digital currencies
and cryptocurrencies. Digital currencies, issued
by governments and central banks, will certainly
become part of the future. Since the beginning of
2022 alone, three key panels on the future of digital
currency have been held at the US Federal Reserve,
the European Central Bank, and the Bank of India.
“Palestinians can build
stablecoins designed specifically
for Palestinian use and crossborder payment, involving
worldwide solidarity networks
and pro-Palestine businesses.”
Cryptocurrencies, as Tariq notes, have no central
issuing or regulating authority. And while they include
the word “currency” in the name, they do not play
the same role as currency. First, there is still a deep
concentration of cryptocurrency holders—and not only
when comparing advanced to developing countries.
For example, 0.01% of bitcoin holders control 27% of
bitcoins in circulation. More importantly, more than
90% of cryptocurrencies are not used in transactions
to purchase items. In other words, cryptocurrencies are
better understood not as a currency but as a speculative
asset—like a stock, only much more volatile.
The problem of acceptability and volatility is
exacerbated in Palestine, given that Palestinians
import approximately $6.5 billion every year, or
approximately 40% of the total GDP. This means that
those who export to Palestine would need to accept
cryptocurrencies as a form of payment. Furthermore,
while cryptocurrencies are indeed secure, if handled
correctly, investors have been scammed billions of
dollars—more than $14 billion last year alone. In
a country with relatively weak digital literacy, and
lacking an effective regulating body for online scams,
dealing with cryptocurrencies in Palestine today can be
extremely risky.
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Regardless of their viability, are there still
technological aspects of cryptocurrencies
that can be utilized in the Palestinian
context?
Tariq Dana:
Cryptocurrencies are built on blockchain technology,
which offers a range of utilities. Specifically, blockchain
offers the possibility to connect Palestinians worldwide
through Decentralized Autonomous Organizations
(DAOs). DAOs are created to bring together people
who agree to abide by certain rules to coordinate and
self-govern for a common goal through an anonymous
and secured voting system. DAO voting systems can
democratize different fields, such as politics, education,
economy, and other fields of public concern. Most
importantly, DAOs have great potential to surpass
the geographic fragmentation of Palestinians through
using virtual networking for collective and participatory
decision-making.
There are other applications that can be utilized to
facilitate intra-business arrangements in the Palestinian
market. For example, blockchains can offer Smart
Contracts, which are self-executing agreements, to
increase trust in economic transactions. Indeed,
dishonored cheques in the West Bank and Gaza have
been posing serious problems in recent years, amounting
to billions of dollars in losses. This has far-reaching
implications not only for intra-business relations,
but also for social relations, and the Smart Contract
technology could be utilized in certain situations to
secure payment commitments.
Ultimately, though, envisioning blockchain-based
solutions to some problems in Palestine must be realized
through comprehensive strategies, and not technical
policy solutions. That is, our objective should be to
create radical change while avoiding the post-Oslo,
donor-driven, policy reform approach that does little
more than entrench the repressive status quo.
Ibrahim Shikaki:
On the one hand, because the value of cryptocurrencies
is not anchored in any economic or financial foundation
in a traditional sense, cryptocurrencies remain
speculative and extremely volatile investments, and have
recently been likened to Ponzi schemes or a “negative
sum game.”
May 2022
Al-Shabaka Roundtable
On the other hand, the technology used by
cryptocurrencies, known as blockchain, will
certainly revolutionize online transaction recording,
authentication, and cyber security. The technology that
the pseudonym Satoshi Nakamoto “solved” in their
white paper has countless potential applications for
Palestine.
Would Israel allow for this kind of
technological development? How can
Palestinians overcome Israel’s restrictions
on their use of different technologies?
Using blockchain as a decentralized online payment
system can be useful in Palestine, especially with
the rise of new, steadier stablecoins, which are
cryptocurrencies pegged to fiat money, such as the
dollar, or stable commodities, like gold. Payments from
abroad can bypass Israeli restrictions, similar to what
the Afghans have been doing to sidestep US sanctions
and the Taliban; Sure-Remit, popular in remittances
across the African diaspora, is another example. Even
payments within Palestine can utilize this approach,
such as payments for families of political prisoners and
others in need through the Ministry of Social Affairs,
some of which have been targeted by Israel.
There is no doubt that Israel will prevent any move
to develop Palestinian technologies. Palestine’s
technological infrastructure is controlled by Israel,
which imposes various restrictions on the Palestinian
digital economy. For example, Israel only gave
Palestinians access to third generation (3G) mobile
internet in 2018, and the internet speed in the West
Bank and Gaza is among the slowest in the world.
Tariq Dana:
“Envisioning blockchain-based
solutions to some problems
in Palestine must be realized
through comprehensive
“In a country with relatively
weak digital literacy, and lacking strategies, and not technical
policy solutions.”
an effective regulating body
for online scams, dealing with Despite these harsh digital conditions, the internet is
increasingly vital to Palestinian lives. More
cryptocurrencies in Palestine becoming
than 80% of Palestinian households had internet
access
in 2019, compared to 52% in 2017. This is
today can be extremely risky.”
However, I believe another future application can
be even more powerful in the Palestinian context,
and that is toward voting. The use of blockchain for
voting purposes is still in its infant stages, but with
more research and work, it will likely become the
future of voting in the next 10 to 20 years. That is
because blockchain provides exactly what one needs in
elections: anonymous yet auditable results. In Palestine,
this can potentially address issues that arose in the
last planned elections, such as enabling Palestinians in
Jerusalem to vote. This application can also be relevant
in broader efforts to include Palestinian voices from all
around the world in political decision-making, similar to
the efforts toward a global Palestinian National Council
(PNC) election that gained traction in 2011.
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an important sign of increased connectivity among
Palestinians inside and outside of Palestine.
There are always ways to get around Israeli restrictions.
Blockchain technology is borderless, offers deterritorialized spaces for constant innovation, and
produces new opportunities to generate and regenerate
alternatives. For this to be successful, the quest for
technological resistance should turn into a visionary
strategy that prioritizes cross-border engagement. In
short, blockchain technology should be designed and
developed beyond the geographical boundaries of
Palestine, but with the involvement of Palestinians in
Palestine and across the diaspora.
May 2022
Al-Shabaka Policy Brief
That is, Palestine should not be the center of
technological investment, as it would risk direct control
by Israel. Instead, Palestinians and pro-Palestine
developers abroad should play a key role in setting the
technological infrastructure, building applications to
serve the Palestinian cause, and virtually connecting
Palestinians worldwide. And despite slow internet
speeds and relatively poor technological infrastructure
in the West Bank and Gaza, they would be sufficient
for using such applications.
Ibrahim Shikaki:
Israel has historically taken preemptive measures to
stop Palestinian access to cutting edge communication
technologies. This was clear in 2018, when Israel
prohibited towers and equipment for 3G technology
in Gaza. While the chorus of international financial
institutions hail the ICT sector as the savior of the
Palestinian economy, they fail to adequately challenge
Israel’s tight grip over every aspect of the sector.
“The advent of digital
currencies means that
Palestinians will need to be even
more creative, and focus on
cyber education and training.”
To the extent that Israel can halt these developments
from being used in Palestine, it will. In terms of
limiting Palestinian use of technologies like blockchain
or certain types of cryptocurrencies, Israel could
issue military orders banning financial institutions,
including banks and money exchangers, from using
cryptocurrencies. It could also enforce a ban, which
is not as straightforward. But even if there were
strict control over the internet, one would still be
able to access cryptocurrency wallets and complete
transactions using innovative tools, like Blockstream’s
satellite method. Blockstream produces and sells
inexpensive tools that allow individuals to access the
necessary software without the use of the internet.
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Israel has already begun its attempts to halt the use
of cryptocurrencies. In 2021, it claimed that through
an “operational breakthrough,” it was able to identify
and seize cryptocurrency wallets owned by Palestinian
political parties.
In late February 2022, Israel claimed it seized another
30 cryptocurrency wallets. Whether these seizures were
possible through an actual breakthrough or a more
traditional approach, there is no doubt that Israel has
one of the most advanced espionage and surveillance
sectors in the world, which was recently made clear
with the NSO Group hacking software scandal.
However, Israel’s policies have never stopped
Palestinian efforts at mobilization and development,
whether that be in political or economic resistance. The
advent of digital currencies means that Palestinians
will need to be even more creative, and focus on cyber
education and training.
How can Palestinians apply cutting-edge
technology and communications to serve
the growing global Palestine solidarity
movement and Palestinian economic
resistance?
Tariq Dana:
Technology has become indispensable in social justice
struggles. Indeed, the Israeli regime continues to deploy
technology as a cornerstone of its settler-colonial
agenda, and Palestinians have begun using it as a
prominent method of resistance. In fact, Palestinians
and their allies have expanded use of the internet as
an avenue of resistance and mobilization globally,
exposing Israeli crimes to the world and Palestinians’
methods of resistance. This form of online activism
has altered global public opinion in favor of the
Palestinian struggle for freedom and justice.
Research also indicates that young Palestinian
women have successfully used technological tools
of e-resistance to confront Israeli geographic
fragmentation and repressive military occupation in
Jerusalem. Moreover, pro-Palestine movements wage
cyberattacks against Israeli propaganda targets.
However, these efforts are carried out by individuals
and small and scattered groups. Indeed, Palestinian
leadership is largely absent from the technological
sites of struggle due to its inability to adapt to change.
Therefore, the only way to effectively integrate
technology into the Palestinian struggle is with a
strategic vision by a revived national movement.
May 2022
What we need is organized networking and systematic
mobilization of human and financial capital to
make sense of technology within the context of the
Palestinian struggle.
Al-Shabaka
Al-Shabaka
PolicyRoundtable
Brief
There is no direct and clear answer for how the
Palestinians can apply technology in service of their
liberation and in their resistance. However, the first step
in strategizing technology must be through embarking
on serious and comprehensive research. Building solid
knowledge constitutes the foundation for generating
and applying technological tools and strengthening the
technological capacity of the movement.
Ibrahim Shikaki:
Palestinians, both within colonized Palestine and in
exile, have great potential as users of virtual spaces
and platforms for collective political activism and
coordination. The vast majority of Palestinians (96%)
are literate, and secondary school dropout rates are
relatively low (around 2%). The lack of educational
funding and infrastructure means those positive
indicators have not translated into digital literacy, but
that both the institutions and the foundation of such
knowledge do exist. Moreover, as compared to other
developing countries, and despite Israeli policies to
limit access, Palestinians in the West Bank and Gaza
have an “internet reach” of about 70%, and up to 75%
of households have at least one mobile phone, with
smartphones being the majority.
The Palestinian ICT sector is still controlled by Israel,
including many businesses that reflect the usual power
dynamics: Israeli capital and cheap Palestinian labor.
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This dynamic recycles the value added in the Israeli
market and does not lead to positive linkages within
the Palestinian economy. Still, there is huge potential
in the form of two pillars. First, there is tremendous
potential for the political cooperation of Palestinians
worldwide. There have already been several attempts at
this, including the PNC elections campaign, the work
of the BDS movement, the USPCN network, and the
recent Build Palestine summit.
Not unrelated, the second pillar is the collective
economic cooperation of Palestinian capital from the
West Bank and Gaza, inside 1948 territories, and across
the diaspora to advance the sectors that might not be
as susceptible to Israeli physical control, including the
various ICT subsectors. This is not meant to divert
resources from important labor-intensive sectors like
agriculture and manufacturing, but as a complement
to them. Indeed, this kind of cooperation would
necessitate the creation of a collective “Arab economy”
with significant capacity for economic resistance.
Regardless of the future of cryptocurrencies as
investment vehicles, the technology of blockchain
will undoubtedly change the world in years to come.
Palestinians should think about useful ways to harness
the potential of this technology, especially in the
face of Israel’s extreme restrictions on Palestinian
movement and finances. This requires cooperation
from all stakeholders, not just the private sector. The
PA should proactively seek potential areas of practice
and consult with local experts on future strategies.
Al-Shabaka Policy Brief
Tariq Dana is Assistant Professor of Conflict
and Humanitarian Studies at the Doha Institute
for Graduate Studies, and an adjunct lecturer at
Northwestern University in Qatar. He served
as the director of the Center for Development
Studies at Birzeit University and as a senior
research fellow at the Ibrahim Abu-Lughod
Institute of International Studies, the Graduate
Institute of International and Development
Studies in Geneva, and the School of Oriental
and African Studies.
Ibrahim Shikaki is assistant professor of
economics at Trinity College, Hartford, CT.
He earned his PhD from the New School for
Social Research (NSSR) in New York, and held
teaching positions at NSSR, The International
University College of Turin, Birzeit, and Al-Quds
universities. He also held research positions at
the Palestine Economic Policy Research Institute
(MAS) in Ramallah and Diakonia’s IHL Research
Center in East Jerusalem.
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