Cryptocurrency Comes to Gaza

Yousef al-Ashqar, 22, moves quietly through the aisles of the Hyper Mall supermarket in central Gaza’s Nuseirat. His shopping list is ordinary—rice, canned food, detergent—but his method of payment is anything but. When he gets to the cashier, al-Ashqar doesn’t pull out cash or a credit card. Instead, he unlocks his phone and opens a digital wallet containing USDT, a stable cryptocurrency pegged to the US dollar that is widely used in Gaza. A small QR code appears on the screen, which the cashier scans, and the transaction is completed within seconds. “I haven’t used real cash in months,” al-Ashqar says as he places his groceries in a plastic bag. “It’s either broken, fake, or simply gone. But with crypto, I can buy anything I need, including clothes, food, and electronics.”

Al-Ashqar earns a living through online sports betting platforms, and his winnings arrive in USDT, which he stores in a digital wallet. From there, he sends and receives local payments in crypto, avoiding Gaza’s defunct banking system. “Sometimes I exchange a little bit through local brokers,” he says, referring to the informal network of cryptocurrency exchangers that has sprouted up in the Strip. “But most of the time, I simply pay with my phone.” He notes that many shops now accept crypto, especially in large shopping complexes like Nuseirat’s Abu Dalal Mall and Hyper Mall. “Everyone is aware that cash is unreliable,” he says. In this context, he adds, “crypto is freedom.”

Al-Ashqar’s story is just one example of a larger financial transformation taking place across Gaza. Two years of Israeli bombardment and siege have left the enclave in a severe economic crisis. Lacking jobs or savings, families find it difficult to pay for essentials, and those lucky enough to still have work—mostly government staff, United Nations Relief and Works Agency (UNRWA) employees, or freelancers earning from clients overseas—often struggle to get paid. As I have reported elsewhere, this economic disaster is accompanied by a quieter, but no less important, liquidity crisis. Banks have long stopped operating in Gaza, and without reliable access to electricity and the internet, it has been difficult for residents to access or use online banking.

The cash situation is even worse. Shattered ATMs sit like abandoned relics, their screens cracked, cash slots blocked, and buttons missing. Using currency in Gaza now requires hiring brokers, who often charge commissions ranging from 1% to 50% to exchange digital transfers for scarce physical cash. And even if you are able to get bank notes, this doesn’t guarantee that you’ll be able to use them. In the absence of freshly minted money, Gaza’s currency has deteriorated more quickly than it can be replaced, and the few remaining bills feel like fragile scraps of cloth, with faded ink and torn edges from repeated handling. Shopkeepers examine such bills in low light, weighing the value of each before deciding whether to accept it. The condition of the notes is so bad that streetside stalls have appeared to repair them, offering taping and pressing services to render the bills “good enough” to circulate again. But despite such efforts, currency is disappearing. The ten-shekel note, which was once common, is now so rare as to be almost unusable. Larger notes are not better. Paying with a 100-shekel note for an 80-shekel purchase frequently frustrates both buyer and seller: The shopkeeper has no change, and the customer is forced to buy unnecessary items just to use the bill. In all cases, transactions that used to take seconds now take much longer or are altogether impossible.

As physical currency goes extinct, Palestinians in Gaza have turned to a variety of survival strategies, ranging from trust-based options like barter and informal credit lines between neighbors to, increasingly, alternative systems of exchange like cryptocurrency. “With banknotes damaged, banks gone, and no way to get dollars in or out, I can only do commerce and import necessities using cryptocurrencies,” said Rafat Naim, a food merchant in Gaza who now uses Bitcoin to pay foreign suppliers and get items into the Strip through the Israel-controlled Kerem Abu Salem and, occasionally, Rafah crossings. Naim is not alone. In recent months, dealers of essential food items such as sugar and cooking oil have started integrating cryptocurrencies, especially USDT, into their domestic and international transactions. A young, up-and-coming businessman named Ali Ramadan told Jewish Currents that he uses USDT to buy reduced-cost products from vendors who take cryptocurrency, then resells them in nearby marketplaces for cash. “Making money isn’t the only goal,” Ramadan said. “It’s about making the most of what we have and sustaining the market when money is nearly worthless.”

In addition to larger businesses, street vendors and smaller service providers have also adopted cryptocurrencies as a way to transact without using delicate banknotes or rare coins. Amir al-Derawi, the owner of a small food kiosk in Nuseirat Camp, says accepting USDT has simplified his life. “Before, I sometimes waited hours for change or had to refuse torn banknotes,” he said. But now, his e-SIM allows to access mobile data, which he shares with customers through a hotspot. “Customers just scan a QR code, and the payment is done instantly.” The benefits are also apparent to buyers, so much so that Maher Daher, who works for UNRWA in Gaza, expressed his desire for cryptocurrencies rather than US dollars to be used to pay his wage. “The dollar has fallen here,” he said, referring to the fact that the official exchange rate between the US dollar and the Israeli shekel is around 3.31, but has fallen precipitously to 2.28 within Gaza due to the liquidity crisis. “Our income would be protected and daily life would be stabilized if UNRWA paid us in USDT through a secure wallet.”

Additionally, cryptocurrency has become vital for aid organizations seeking to get around Israel’s restrictions—which include Israeli banks’ regular freezing or delaying of transfers into Gaza, and their strict withdrawal limit of 500 shekels ($152) a day. International services such as Western Union and PayPal have also suspended most transfers into Gaza, while approved transfers can be frozen or delayed for weeks, leaving aid distributors without access to essential cash. As a result, local coordinators with four youth-led community initiatives in Gaza—all of whom wished to remain anonymous for protection—told Jewish Currents that many donations for food, water, and medical assistance into Gaza now come in USDT. Donors, who are often relatives and well-wishers abroad, send the crypto to local middlemen in the Strip, who then distribute the money to families in need through secure wallets like Binance, or use crypto to buy and disburse aid supplies directly. “Donations simply couldn’t reach Gaza without cryptocurrencies,” said one independent aid organizer. Another volunteer with an initiative in Nuseirat agreed, adding that crypto has become the easiest way to collect and move donations under siege. “Without USDT, we wouldn’t be able to buy even a single water tank,” they said.

But even as cryptocurrencies have offered a taste of economic freedom to Palestinians living amid a destroyed financial system and a blockaded economy, they also come with significant risks. Many locals lack the smartphones and technical knowledge necessary to operate digital wallets, forcing them to rely on informal brokers to exchange cryptocurrency for local items, sometimes at exorbitant costs. Sometimes, such brokers keep the client’s money and never send the crypto. Ghassan Shaker, for instance, received a transfer of 357 USDT from his sister in Kuwait through a local broker. “I trusted the broker to deposit the crypto into my wallet, but he never did. I gave him the full amount, and it just vanished,” Shaker explained. His story highlights the risks many face when relying on unofficial intermediaries in Gaza’s fragile digital economy. Even those who possess their own digital wallets are vulnerable to fraud in the form of phishing scams as well as fake cryptocurrency websites, which trick victims into entering their details on the pretext of setting up their wallets and then steal their money.

More broadly, these issues point to the ways that unregulated cryptocurrencies, although useful in facilitating immediate survival for some, ultimately cannot take the place of a properly operational banking system. “Even as aid flows through these channels, people who lack digital literacy or dependable internet access run the risk of being left behind,” said Mahmoud Deeb, a Turkish financial expert of Palestinian descent. Further, he noted that cryptocurrencies cannot solve broader problems like unemployment and lack of access to financial services, which can ultimately only be addressed by a reconstruction of Gaza’s economy and the restoration of its banking system. As Deeb stressed, “reliance on cryptocurrencies is only a temporary solution.”