Palestine, State of

## Report on the Status of Retail Cryptocurrency Trading in the State of Palestine

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued)

**1. Identified Status:** **Banned**

**2. Narrative Explanation:**

The Palestine Monetary Authority (PMA), which functions as the de facto central bank for the State of Palestine, has explicitly stated that the prevailing legislation prohibits trading in virtual assets (cryptocurrencies) and prohibits any entity from operating as a virtual asset service provider within Palestine. This stance has been communicated through official warnings issued to the public.

The PMA has repeatedly warned citizens against dealing with cryptocurrencies like Bitcoin (BTC) and Tether (USDT), citing significant risks. These risks include the lack of guarantees or backing by any official entity, the unregulated and unlicensed nature of virtual asset service providers, high price volatility leading to potentially severe financial losses, and the difficulty in tracking or recovering funds lost to fraud or cybercrime. The PMA emphasizes that licensed banks under its supervision are the secure places for citizens' funds.

Furthermore, religious authorities have also weighed in. In late 2017, the Palestinian Fatwa House (Dar al-Ifta) issued a fatwa (religious ruling) declaring the trading of cryptocurrencies, including Bitcoin, as haram (forbidden) due to associations with gambling, significant ambiguity (gharar), unknown sources, lack of backing, high volatility, and potential for fraud.

While there is informal usage of cryptocurrencies, particularly in Gaza, driven by economic hardship, limitations on traditional financial systems, and the need for cross-border transactions (like receiving payments for freelance work or humanitarian aid), this usage occurs outside the official legal and regulatory framework. The PMA's explicit prohibition and the lack of licensed exchanges operating with local banks reinforce the "Banned" status for formal, legally sanctioned retail trading. Major international exchanges like Binance do not officially operate or support services in Palestine, further limiting access for residents.

Although the PMA has explored the possibility of issuing its own Central Bank Digital Currency (CBDC) to potentially reduce reliance on the Israeli shekel, this initiative is separate from the regulation of existing decentralized cryptocurrencies like Bitcoin and does not alter the current prohibition on their trading by the public.

**3. Relevant Text Excerpts:**

*   **Palestine Monetary Authority (PMA) - May 8, 2023:**
    *   "The Palestine Monetary Authority explained that the **legislation in force in the State of Palestine prohibits trading in virtual assets and also prohibits any entity from operating as a provider of virtual asset services**... stressing that dealing with virtual assets and cryptocurrencies (such as: Bitcoin, USDT...) involves significant risks, because they are not guaranteed by any party, and because virtual asset service providers are unlicensed and not subject to supervision by any regulatory authority..." (Summary translation from Arabic)
    *   "The Monetary Authority stressed the need for citizens to refrain from dealing with platforms, websites, and providers of virtual asset services..." (Summary translation from Arabic)
*   **Palestine Monetary Authority (PMA) - April 30, 2017 & December 10, 2017 (Reiterated Warning):**
    *   "...it warns citizens against dealing with so-called virtual currencies in all their forms, especially Bitcoin, due to the very high risks these currencies carry as they are not guaranteed by any party and are highly volatile... all entities and parties that offer and deal with these currencies are not subject to or licensed by any regulatory authority." (Summary translation from Arabic)
    *   "Therefore, the Monetary Authority calls on citizens not to deal with these currencies, whether for investment, savings, commercial exchange, or other financial transactions, in order to protect them from exposure to any financial losses or risks." (Summary translation from Arabic)
*   **Dar al-Ifta al-Filastiniyya (Palestinian Fatwa House) - December 2017:**
    *   "The Palestinian Fatwa House issued... a fatwa prohibiting dealing with virtual electronic currencies, including 'Bitcoin'."
    *   "The Fatwa House attributed the reason for prohibiting virtual currencies in Palestine to their association with 'gambling' and containing excessive uncertainty (gharar)..."
    *   "...it is not permissible to buy or sell [Bitcoin and other virtual currencies] because it is a currency of unknown origin, has no guarantor, is highly volatile, and allows scope for fraud and deception." (Summary translation from Arabic)
*   **UPay Blog (December 4, 2024):**
    *   "Adoption Status: Cryptocurrency is not officially legal in Palestine, and it is not considered a legal tender. The Palestine Monetary Authority (PMA) has issued warnings and discourages its use."
*   **TRT World (referencing PMA stance):**
    *   "Presently, the PMA has enforced a ban on cryptocurrencies in the West Bank."
    *   "Because of its illegality though, there is no way for Palestinians to upload their shekels, dollars or dinars into online crypto exchanges, since none of them operate with local banks."

**4. Source URLs:**

*   **PMA Warning (May 8, 2023):** [https://www.pma.ps/ar/Media/PressRelease/11104](https://www.pma.ps/ar/Media/PressRelease/11104)
*   **PMA Warning (April 30, 2017):** [https://www.pma.ps/ar/Media/PressRelease/10813](https://www.pma.ps/ar/Media/PressRelease/10813)
*   **Al-Iktissadi (Reporting PMA Warning Dec 10, 2017):** [https://www.aliqtisadi.ps/ar/article/30437/سلطة-النقد-تحذر-المواطنين-من-التعامل-مع-العملات-الافتراضية](https://www.aliqtisadi.ps/ar/article/30437/سلطة-النقد-تحذر-المواطنين-من-التعامل-مع-العملات-الافتراضية)
*   **Quds News Network (Reporting Fatwa Dec 2017):** [https://qudsn.co/post/111418/](https://qudsn.co/post/111418/)
*   **UPay Blog (Crypto Adoption Overview):** [https://upay.co.uk/blog/crypto-adoption-palestine/](https://upay.co.uk/blog/crypto-adoption-palestine/)
*   **TRT World (Context on PMA Ban & CBDC):** [https://www.trtworld.com/magazine/can-a-digital-currency-provide-palestinians-with-monetary-sovereignty-47857](https://www.trtworld.com/magazine/can-a-digital-currency-provide-palestinians-with-monetary-sovereignty-47857)
*   **Arab Islamic Bank (Referencing PMA Instructions & Fatwa):** [https://aib.ps/ar/islamic-banking-and-awareness/digital-currencies](https://aib.ps/ar/islamic-banking-and-awareness/digital-currencies)