A Vision for Economic Stability: Syria is considering legalizing Bitcoin among an ambitious financial reform package proposed by the Syrian Center for Economic Research, aimed at stabilizing the war-torn economy, combating inflation, and attracting foreign investment to help in rebuilding. The reform comes when Syria has been struggling with decades of conflict and economic mismanagement that have left its infrastructure in ruins and its currency devalued.
Integrating Blockchain into Syria’s Economy
At the heart of the plan is the digitization of the Syrian pound through blockchain. The digital currency is to be backed with reserves of Bitcoin, gold, and U.S. dollars in order to gain confidence and stability. Besides that, the government wants to legalize the mining and trading of Bitcoin within a strict regulatory framework. The initiative hopes to spur a new mining industry-which the country would be well-placed for, given abundant energy resources-while addressing concerns about monopolization and environmental impact.
Supporting Businesses and Remittances
The plan seeks the incorporation of Bitcoin into financial services, startups, and currency exchanges to spur economic recovery. It focuses on streamlining remittances-a major source of income for many Syrian families-and opening up opportunities to businesses that have been crippled by many years of conflict. Key in this is privacy and security: residents must be afforded the right to self-custody their digital assets free of exploitation.
Challenges Overcome
But the plan comes with many obstacles. The country is under strict international sanctions, still lacks modern technological infrastructure, and runs huge debts from the previous regime. And while Bitcoin’s decentralized nature means that it can avoid traditional banking restrictions, implementing such a system will require significant technological investment and international cooperation.
Legal and Ethical Considerations
The reform proposition is toward a transparent and legitimate financial system, not one embracing the illicit use of virtual currencies by outfits such as Hay’at Tahrir al-Sham. This jihadist group, formerly part of al-Qa’idah, has used digital currencies to finance activities, as various reports claimed, hence raising ethical and legal considerations. In contrast, this plan by the Syrian Center for Economic Research will seek to benefit all citizens through legitimate channels overseen by the transitional government.
Global precedents, the way forward for Syria: This has been tried with partial success by countries such as El Salvador and the Central African Republic. There was some higher tourism inflow in El Salvador and partial foreign direct investment inflow, though much criticism about economic risk. The geopolitics around Syria is particularly complicated, but if pulled off, this could be a unique leading position in cryptocurrency adoption for Syria within the Middle East.
