A lifeline to stimulate the Crypto economy

Syria's transitional government is considering proposals to legalize bitcoin and digitize the Syrian pound.

It is a bold move to stabilize the country's battered economy and attract international investment.

Syria sees Bitcoin as the lifeline of its economy.

The plan, developed by the Syrian Center for Economic Research (CCR), describes how crypto adoption can help rebuild the country after the fall of the Assad regime. He considers bitcoin a critical tool for Syria's financial revival.

Indeed, decades of war and economic deprivation have devastated the country's economy. According to the World Bank, the Syrian economy has shrunk by more than 60% since 2010. The value of the Syrian pound has also declined, which is eroding public confidence in traditional banks.

To address these challenges, SCER suggests a multi-pronged approach, including legalizing Bitcoin for trade, mining and financial transactions. He also proposed digitizing the Syrian pound using blockchain, backing it with assets such as gold, US dollars and bitcoin. It also recommends using unused energy resources for Bitcoin mining, ensuring environmental sustainability and eliminating monopolies.

Cryptocurrencies are already widely accepted in Syria, albeit in controversial ways. Prominent opposition forces such as Hayat Tahrir al-Sham (HTS) are said to have used Bitcoin for their operations. While the SCER scheme aims to legalize and regulate the use of crypto, concerns remain about the misuse of digital currencies by such groups.

“The Central Bank controls this process, ensuring a safe and accountable framework,” SCER emphasized in its decision.

Legalizing Bitcoin could bring many benefits to Syria. First, it opens the door to international investments and partnerships, as in the case of El Salvador. It also eases remittances, a lifeline for millions of Syrians who rely on remittances. In addition, citizens remain in control of their digital assets, enhancing privacy and security.

Bitcoin's decentralized nature could help Syria bypass international sanctions that have long restricted its access to the global financial system. This strategy mirrors the approaches that countries such as Russia, Iran and North Korea have used cryptocurrencies to mitigate the effects of sanctions.

Global view on Bitcoin reserves

Syria's interest in Bitcoin is related to the growing global trend of cryptocurrency as a financial stabilizer. As BeInCrypto reports, Switzerland is discussing including Bitcoin in national reserves to promote financial innovation.

Similarly, a Russian lawmaker proposed to create a strategic Bitcoin reserve to improve financial stability in the block. These global examples can provide valuable lessons for Syria as it charts its crypto journey.

However, despite its potential, the proposal faces significant hurdles. While blockchain transparency can reduce some risks by tracking transactions, it also introduces regulatory challenges. Ensuring that crypto adoption supports legitimate economic activities without enabling illegal activities requires strict regulation.

Bypassing traditional banking systems may provide short-term relief but risks further international scrutiny, potentially widening Syria's isolation. Building the infrastructure of the digital economy requires significant investment and time. Additionally, geopolitical complexities pose challenges, with Syria's economic recovery likely to involve regional players such as Russia, Iran, and Turkey.

While Russia and Iran have strong crypto economies, their role in the future reconstruction of Syria is uncertain. Neighboring countries such as Lebanon and Turkey that have embraced crypto could be potential partners or competitors.

However, SCER's grand proposal could lift Syria out of economic despair. If implemented successfully, it will change the country's financial situation and create stability and development opportunities.