The Syrian transitional government is exploring a groundbreaking proposal to legalize Bitcoin and digitize its national currency as part of ambitious plans to rebuild its war-ravaged economy.
The proposal, developed by the Syrian Center for Economic Research (SCER), outlines a comprehensive strategy to integrate Bitcoin and blockchain technology into the country's financial system. At its core, the plan involves digitizing the Syrian pound and backing it with assets including gold, US dollars, and Bitcoin to combat severe inflation.
According to World Bank data, Syria's economy has contracted by over 60% since 2010 due to decades of conflict and economic turmoil. The Syrian pound has experienced dramatic devaluation, eroding public confidence in traditional banking.
The SCER's multi-pronged approach includes:
- Legalizing Bitcoin for trading, mining and financial transactions
- Utilizing domestic energy resources for Bitcoin mining operations
- Implementing regulatory frameworks to prevent monopolies
- Promoting financial inclusion through cryptocurrency services
- Enabling self-custody of digital assets for citizens
The plan could potentially help Syria bypass international sanctions that have restricted its access to global financial markets. Similar approaches have been adopted by other sanctioned nations like Iran and North Korea.
However, the proposal faces major hurdles including:
- Limited technological infrastructure
- Substantial inherited debt
- Need for international cooperation
- Regulatory challenges around illicit activities
- Ongoing geopolitical complexities
Some groups like Hay'at Tahrir al-Sham have reportedly already used Bitcoin to fund operations, highlighting the need for strict oversight of cryptocurrency adoption.
If successfully implemented, the initiative could transform Syria's economic landscape by attracting foreign investment and simplifying remittances for millions of Syrians abroad. The proposal positions Syria to potentially become a cryptocurrency leader in the Middle East, though significant obstacles remain on the path to implementation.
The SCER emphasized that the central bank would oversee the process to ensure security and accountability. While the vision is ambitious, its success depends heavily on overcoming technical, financial and political challenges in the months ahead.