The possibility of using Bitcoin in the economic recovery of Syria: opportunities and challenges

• Syria is considering legalizing Bitcoin and digitizing the Syrian pound to stabilize its war-torn economy and attract investment.

• The plan includes using blockchain to stabilize currency, mine energy resources, and enact regulations to prevent cryptocurrency abuse.

• Financial recovery is targeted, along with challenges such as building infrastructure, addressing regulatory hurdles and geopolitical surveillance.

Syria’s proposal to legalize Bitcoin and digitize its currency could shape its economy and attract global investment amid recovery efforts.

Syria sees Bitcoin as a lifeline for its economy

Created by the Syrian Center for Economic Research (SCER), the plan outlines how the adoption of cryptocurrency could help rebuild the country after the fall of the Assad regime. Plan, BitcoinHe envisions it as a key tool for Syria’s financial recovery.

Indeed, decades of war and economic mismanagement have destroyed the country’s economic structure. According to the World Bank, the Syrian economy has shrunk by more than 60% since 2010. The Syrian pound has also lost value, and inflation has eroded public confidence in traditional banking.

To overcome these challenges, SCER offers a multifaceted approach that proposes legalizing Bitcoin for trading, mining and financial transactions. Additionally, the Syrian pound blockchain He proposes digitizing it using digital assets and stabilizing it by backing assets such as gold, the US dollar and Bitcoin. It is also recommended to use unused energy resources for Bitcoin mining, while ensuring environmental sustainability and avoiding the creation of monopolies.

Cryptocurrencies have already gained momentum in controversial ways in Syria. Groups like Hay’at Tahrir al-Sham (HTS), a prominent opposition force, reportedly use Bitcoin to finance their operations. Although SCER’s plan aims to legitimize and regulate the use of cryptocurrencies, there are concerns about the potential for digital currencies to be misused by such groups.

“The central bank will monitor this process and ensure a safe framework,” SCER pointed out in its proposal.

Legalizing Bitcoin could bring many benefits to Syria. First of all, it will provide a much-needed economic boost by opening the door to international investment and partnerships, as in the case of El Salvador. It will also facilitate remittances, which are the lifeblood of millions of Syrians who depend on money sent from abroad. In addition, citizens will remain the owners of their digital assets, increasing privacy and security.

Bitcoin’s decentralized nature could also help Syria circumvent international sanctions, which have long limited the country’s access to the global financial system. This strategy is similar to the approaches of countries such as Russia, Iran and North Korea, which use cryptocurrencies to mitigate the impact of sanctions.

A Global Perspective on Bitcoin Reserves

Syria’s interest in Bitcoin coincides with a growing global trend of exploring crypto as a financial stabilizer. According to COINOTAG, Switzerland is discussing adding Bitcoin to its national reserves.

Similarly, a Russian lawmaker has proposed creating a strategic Bitcoin reserve to increase financial stability amid sanctions. These international examples can offer valuable lessons when designing a Syrian crypto trip.

However, despite its potential, the proposal faces significant obstacles. While blockchain transparency can reduce some risks, the traceability of transactions also presents regulatory challenges. Ensuring that cryptocurrency adoption supports legitimate economic activity without enabling illicit transactions will require strict oversight.

Avoiding traditional banking systems may provide short-term relief, but may lead to increased international scrutiny and possible deepening of Syria’s isolation. Building the infrastructure of the digital economy will require significant investment and time. In addition, Syria’s economic recovery is likely to involve regional players such as Russia, Iran and Turkey, and geopolitical complexities present challenges.

Although Russia and Iran have strong cryptoeconomies, their future roles in Syria’s reconstruction remain unclear. Neighboring countries Lebanon and Turkey that have adopted crypto could become potential partners or competitors.

Still, SCER’s ambitious proposal could save Syria from economic despair. If successfully implemented, it could transform the country’s financial situation, offering opportunities for stability and growth.

Conclusion

SCER’s proposal represents a significant step towards the use of cryptocurrencies in a war-torn economy. Through the strategic integration of Bitcoin and blockchain technology, Syria can not only stabilize its currency, but also attract investment that will support long-term recovery. However, careful enforcement and strict regulations will be key to dealing with the risks and challenges they will face.