With bank infrastructure in ruins, Gaza gets a lifeline from cryptocurrencies

With the absence of a functional central bank in Palestine and with most banks and ATMs in the Gaza Strip destroyed or damaged by Israel since October 7, Palestinian civilians in the enclave have been facing unimaginable humanitarian devastation and financial strains.

Despite the crumbling banking systems, a lifeline has emerged: cryptocurrencies.

As a result, many civilians have turned to cryptocurrencies to navigate the financial and economic collapse.

Bitcoin with Tether (USDT), among other digital currencies, has become crucial in sustaining life in Gaza and providing urgent humanitarian assistance to the masses. 

However, general awareness of cryptocurrencies among civilians in Palestine began in 2018.

A cryptocurrency user and humanitarian aid worker from Gaza City, who chose to remain anonymous, said they first heard about trading cryptocurrency in 2018, which prompted him to create an account on Binance, a cryptocurrency exchange, in hopes of making extra income.

But shortly after several attempts at trading, the aid worker stopped.

“It’s not easy to trade in this market,” he explained.

Initially, the aid worker had been receiving donations from a friend abroad since 2020 via USDT to create food baskets to feed families in need every Ramadan.

This enabled them to buy basic essentials and distribute them to the poor. However, due to frequent displacements caused by the ongoing violence in Israel, the aid worker and their family have also become reliant on humanitarian assistance. They now receive support in the form of USDT for their well-being.

This aid has been critical in securing “food, water, clothes, and other necessities during these hard days of the genocide,” the aid worker told The New Arab.

The aid worker has simultaneously collaborated with mutual aid groups abroad to establish a local team within the area, aiming to alleviate the severe humanitarian suffering affecting civilians.

Cryptocurrency in blockaded Gaza

On October 9, Israeli Defence Minister Yoav Gallant announced a total blockade on Gaza, declaring that no food, fuel, or electricity would enter the Gaza Strip.

This catastrophic decision led to the forced starvation of tens of thousands of civilians in northern Gaza.

The cryptocurrency user and his small team created several campaigns to provide urgent humanitarian aid, focusing on food available in the markets to people in the northern areas and Rafah.

“I received money via cryptocurrency platforms and then exchanged the money here. We distributed food baskets to hundreds of families in need in the northern Gaza Strip. Without the cryptocurrency platforms, we wouldn’t be able to do this campaign and receive funds,” the aid worker told The New Arab.

“I usually receive USDT via my cryptocurrency platform. I have an address, and I send my address to the sender or donor familiar with the cryptocurrency platforms.

"The sender then sends the USDT to my wallet (in minutes), and later I exchange the USDT into our local currency via the exchange offices,” he explained. 

On Telegram Messenger, there is a group that provides the opportunity for thousands of traders and exchange offices in Gaza to buy and sell cryptocurrencies.

They can interact directly with each other to stay updated on the latest news, ask questions, or stay alert about any scammers. 

The aid worker acknowledges that exchange offices now charge significantly higher fees, ranging from 15% to 22%, compared to just 1% before the war.

Despite the exorbitant fees and the cost of living in Gaza, the aid worker highlights a silver lining that traditional banking systems cannot provide:

“The good thing about cryptocurrency platforms is receiving and sending money easily and instantly without restrictions, away from the complicated processes of banks.”

Empowering Palestinian relief efforts

“Empowering people and giving them that sense of empowerment is different compared to them just receiving charity. He has the power to decide how best to help his people there,” London-based Tech Consultant and humanitarian Adam Suleiman* told The New Arab.

Suleiman, who now works in the Bitcoin industry, recounts his first encounter with Bitcoin in Gaza through a Muslim Bitcoin Community on X.

“There are many Muslims in the Bitcoin industry aiming to create a fairer monetary system. I found my Gazan contact, [a humanitarian aid worker and Bitcoin user], through these networks,” he explained.

The Gazan contact arranged Suleiman’s initial Qurbani using Bitcoin in 2021.

Suleiman describes the traditional banking system as having “a lot of injustice and discrimination. In places like Palestine, people can't easily access modern banking.”

Working in the Bitcoin industry now, he aims to fix this broken system so that “we have something outside of the control of the state, so people can interact freely with one another, like sending money to Gaza with ease.

"Bitcoin offers a way to send money directly within seconds to Gaza, circumventing these barriers,” he argues.

Through his initiative Quds Fund created at the beginning of the genocide, Suleiman regularly receives large donations from donors eager to help alleviate the suffering of Palestinians in Gaza.

Donors send from Singapore, the UK, the US, Canada, Australia, and Brunei. He says Bitcoin enables them to “break down artificial man-made barriers like the borders of countries.”

Changing lives during the genocide

Finding a trustworthy recipient in Gaza was crucial for Suleiman. With the same Gazan contact, he made years ago and through his networks, they have managed to deliver urgent humanitarian relief for civilians in the middle areas of Gaza.

Sending a total of two whole bitcoins (the equivalent of $123,000) so far, his contacts there and their established team have distributed food, including scarce meat and water supplies, and even built temporary shelters for a number of the displaced population.

Cryptocurrency has proven highly beneficial in Gaza's volatile conditions. When recipients receive Bitcoin, they promptly convert it into Israeli Shekels or US Dollars. This enables them to purchase essential supplies, which are then distributed directly to families' homes. 

“This method is more efficient and safer, as it helps save lives and reduces the number of vulnerable people handling aid,” he explains.

However, due to the Israeli blockade, “Palestinian civilians cannot always get the supplies they need. It is situational and dependent on what gets through into Gaza at the time my contacts get the money,” Suleiman adds.

“In the past, aid has been trickling in through various sources, like through Rafah, for example, airdrops or the port the US built. [My local team] would then go out in search of what is needed, even from the black markets if necessary.”

For Suleiman, Gazans need to have a sense of agency and empowerment rather than just receiving charity. He believes Bitcoin is thus empowering human resilience.

Israel hinders cash flow

Digital currencies can impact the lives of Palestinians in dire situations, especially by providing urgent humanitarian aid during the ongoing genocide.

But the worsening conditions and the total siege of all border crossings, including the Rafah crossing seized by Israeli forces, make this increasingly difficult. 

For more than nine months, Israel has prevented the import of cash into Gaza.

Previously, cash flowed through the Erez Crossing from the government in Ramallah, but now Gaza is experiencing a severe shortage of money.

Cryptocurrency users in Gaza City are hopeful that local shops and markets will one day accept payments in Bitcoin or USDT.

One user expressed, "It would be great if this happens." Another user recounted to The New Arab how he used Bitcoin to buy a calf.

While cryptocurrency adoption is expected to grow over time in Palestine, this vision remains distant for now.

*Name changed to protect identity.

Azraa Muthy is a photographer and multilingual journalist with a background in investigative journalism