Syria Proposes Bitcoin Legalization to Rebuild War-Torn Economy

Syria’s transitional government is considering a proposal to legalize Bitcoin and digitize the Syrian pound.

It marks a bold move to stabilize the country’s shattered economy and attract global investment.

Syria Mulls Bitcoin as Lifeline for Its Economy

The plan, crafted by the Syrian Center for Economic Research (SCER), outlines how crypto adoption could help the nation rebuild after the collapse of the Assad regime. It envisions Bitcoin as a crucial tool for Syria’s financial revival.

Indeed, decades of war and economic mismanagement have left the country’s economy in ruins. According to the World Bank, Syria’s economy has shrunk by over 60% since 2010. The Syrian pound has also plummeted in value, with inflation eroding public trust in traditional banking.

To address these challenges, the SCER suggests a multi-faceted approach, including legalizing Bitcoin for trading, mining, and financial transactions. It also proposes digitizing the Syrian pound using blockchain, stabilizing it by backing it with assets like gold, US dollars, and Bitcoin. Furthermore, it recommends utilizing untapped energy resources for Bitcoin mining while ensuring environmental sustainability and avoiding monopolies.

Cryptocurrencies have already gained traction in Syria, albeit in controversial ways. Groups like Hay’at Tahrir al-Sham (HTS), a prominent opposition force, have reportedly used Bitcoin to fund their operations. While the SCER’s plan aims to legitimize and regulate crypto use, concerns linger about the potential misuse of digital currencies by such groups.

“The central bank will oversee this process, ensuring a secure and accountable framework,” the SCER emphasized in its proposal.

Legalizing Bitcoin could provide numerous advantages for Syria. First, it would open the door for international investments and partnerships, like in the case of El Salvador, offering a much-needed economic boost. It would also simplify remittances, a lifeline for millions of Syrians relying on funds sent from abroad. Additionally, citizens would retain self-custody of their digital assets, enhancing privacy and security.

Bitcoin’s decentralized nature could also help Syria bypass international sanctions that have long restricted its access to the global financial system. This strategy mirrors approaches taken by countries like Russia, Iran, and North Korea, which have used cryptocurrencies to mitigate the impact of sanctions.

A Global Perspective on Bitcoin Reserves

Syria’s interest in Bitcoin aligns with a growing global trend of exploring cryptocurrency as a financial stabilizer. As BeInCrypto reported, Switzerland is discussing including Bitcoin in national reserves to drive financial innovation.

Similarly, a Russian lawmaker proposed creating a strategic Bitcoin reserve to improve financial stability amid sanctions. These international examples could provide valuable lessons for Syria as it designs its crypto journey.

Nevertheless, despite its potential, the proposal faces significant obstacles. While blockchain’s transparency could mitigate some risks by making transactions traceable, it also introduces regulatory challenges. Ensuring that crypto adoption supports legitimate economic activities without enabling illicit operations will require stringent oversight.

Bypassing traditional banking systems may offer short-term relief but risks further international scrutiny, potentially deepening Syria’s isolation. Building the infrastructure for a digital economy will demand significant investment and time. Additionally, geopolitical complexities pose challenges, with Syria’s economic recovery likely involving regional players such as Russia, Iran, and Turkey.

While Russia and Iran have strong crypto economies, their future roles in Syria’s reconstruction remain uncertain. Neighboring countries such as Lebanon and Turkey, which have also embraced crypto, could become potential partners or competitors.

Notwithstanding, the SCER’s ambitious proposal could pull Syria out of economic despair. If implemented successfully, it could transform the nation’s financial status, providing stability and opportunities for growth.