Syria Consider Legalizing Bitcoin to Curb Economy Crisis

The SCER proposed a Bitcoin policy bill, urging Syria to adopt Bitcoin as legal tender to revive its economy.

The Syrian economy, ravaged by protracted conflict and crippling sanctions, is grappling with a profound crisis. The Syrian pound has plummeted, the economy has shrunk by over 60% since 2010 according to World Bank figures, and the nation faces a long road to recovery.

Syria Aims to Revitalize Economy Using Bitcoin

In a dramatic attempt to revitalize its flagging financial system and attract desperately needed foreign investment, the Syrian Center for Economic Research (SCER), a non-governmental think tank, has proposed a radical solution: the legalization of Bitcoin.

The SCER’s recently published Bitcoin policy bill, disseminated via Telegram, outlines a comprehensive strategy for integrating Bitcoin into the Syrian economy.

The plan encompasses three core pillars: adopting Bitcoin as a legal tender for transactions, developing a robust Bitcoin mining industry, and creating a digital Syrian pound pegged to Bitcoin.

Furthermore, the proposal envisions a regulatory framework governing Bitcoin’s purchase, sale, trading, and mining activities. This framework carefully balances the need for market freedom with compliance with international and domestic legal standards. It aims to establish a transparent and predictable environment to foster investor confidence and attract participation from domestic and international stakeholders.

A particularly noteworthy element of the plan is the creation of a Central Bank Digital Currency (CBDC), a digital version of the Syrian pound. This digital currency would be backed by hard assets, such as US dollars, and operate on blockchain technology, thereby enhancing transparency and security. The proposal highlights the potential of this CBDC to streamline financial transactions and improve the efficiency of monetary policy.

Syria’s low electricity prices – among the lowest globally, at $0.003 per kilowatt-hour – present a significant opportunity. The SCER’s proposal suggests harnessing this advantage by encouraging Bitcoin mining, subject to appropriate environmental regulations and safeguards against monopolies.

Entrepreneurs will use the country’s energy resources to mine Bitcoin and digital assets. The government will facilitate their innovation and expansion, while preventing monopolies and negative societal and environmental impacts.

SCER Proposal Could Draw Infinite Changes

The bill explicitly advocates for a shift away from reliance on usurious loans and inflationary monetary policies, urging instead the adoption of conservative free-market principles. Moreover, the proposal further encourages the integration of Bitcoin into the operations of banks, startups, and currency exchanges, facilitating broader adoption and market penetration.

However, the SCER acknowledges the challenges inherent in implementing such a bold policy. External sanctions, technical hurdles, and the legacy of substantial government debt present significant obstacles. The success of this initiative hinges on the ability to overcome these challenges and build a robust, secure, and transparent digital financial infrastructure.