Syria explores Bitcoin legalization to rebuild post-war economy

The proposal to legalize Bitcoin aims to reshape Syria’s financial future.

Syria, a country still trying to recover from the overthrow of the Assad government, is preparing for a radical financial reform: the legalization of Bitcoin (BTC).

To combat inflation, stabilize the country’s economy and attract foreign investment, the Syrian Center for Economic Research has put forward a bold plan calling on the transitional government to adopt BTC and other digital currencies.

After decades of war and economic devastation, the country now faces a daunting task of reconstruction.

To bring much-needed stability to the currency, the plan calls for the Syrian pound to be digitized on the blockchain and backed by BTC, gold and the dollar. In addition to encouraging business people to use Syria’s energy resources for mining activities, it also aims to legalize BTC mining and trading under a comprehensive regulatory framework, guaranteeing tight control to prevent monopolies and environmental damage.

Financial institutions, startups, and currency exchanges will be encouraged to integrate BTC into their offerings to facilitate remittances and create opportunities for companies affected by years of volatility. The program emphasizes that privacy and security are core values ​​and emphasizes the right of Syrian residents to have full oversight over their digital assets.

Despite these lofty goals, the country faces numerous challenges, including external sanctions, inadequate technical infrastructure, and debts from the previous government. BTC’s decentralized structure could allow it to evade Syria’s established banking institutions, a tactic used by other countries under strict sanctions, such as North Korea and Iran.

It is crucial to distinguish between the Syrian Center for Economic Research’s proposal to legalize BTC and the contentious use of cryptocurrencies by terrorist groups such as Hay’at Tahrir al-Sham. HTS, which was previously affiliated with Al Qaeda, reportedly used digital currencies to finance its operations, raising significant ethical and legal concerns.

In response, the Syrian Center for Economic Research aims to establish a legitimate, transparent financial system, under the supervision of the transitional government, that will benefit the entire Syrian population rather than specific groups.

Countries such as El Salvador and the Central African Republic have attempted to legalize BTC with varying degrees of success. El Salvador has been criticized for economic risks and debt problems, despite seeing an increase in tourism and some international investments.

In contrast, Syria’s challenges are exacerbated by geopolitical challenges and require significant technology investments and international cooperation to succeed. If implemented, the strategy could make Syria a leader in the Middle East in the adoption of cryptocurrencies, but it is doubtful whether it will be successful given long-standing political and financial obstacles.