What cash can tell us about Palestine’s fragmented geography
Dr Christopher Harker, Habib Hinn, Dareen Sayyad, Reema Shebeitah
On 30th October 2025, the Palestine Monetary Authority (PMA), Palestine’s nearest equivalent to a central bank without the authority to issue currency, published a draft law to limit the use of cash. The proposed law would prohibit cash transactions above ILS 20,000 (or equivalent) and requires all public institutions to process payments through non-cash methods. One of the biggest reasons for this draft policy is what is called the shekel glut. Banks in the West Bank have accumulated ILS 15 billion, with some using improvised storage containers because their vaults are full (PMA, 2025b; Wafa, 2025).
On the 30th November 2025, BBC News published a story about Baraa Abu al-Aoun, an entrepreneur in Gaza City who has started a business ‘fixing’ banknotes. Using a ruler, pencils, coloured pencils and glue, Abu al-Aoun keeps the increasingly limited supply of bank notes in circulation, while earning a small amount of money doing so.
Why does Gaza have so few bank notes, such that people are desperately trying to keep them in circulation, while at the same time policy makers in the West Bank are trying to get rid of cash?
Among the many horrific effects of the genocide in Gaza, the financial system has been destroyed. A UN Interim Rapid Damage and Needs Assessment published in February 2025 reported that 33 out of 56 bank branches in Gaza the Strip have been completely destroyed and 19 partially damaged. Only 2 of the 94 ATMs remain semi-functional. All others are destroyed or partially damaged. Israel has blocked new physical currency from entering the Gaza Strip since 7th October 2023 and there is credible evidence of looting by Israeli forces. A great deal of physical money has been destroyed or deteriorated to the point of no longer being usable. But there are also no digital alternatives. As Gaza based journalist Hani Qarmoot puts it: “There is no power. There’s no internet. No POS machines. When you show your card to a seller, they shake their head.” This crisis is decades in the making, a result of repeated Israeli blockades and military destruction.
Palestinians living in the West Bank are also facing economic collapse, with a massive increase in unemployment, small business closures and widespread destruction of agricultural land and property. However, for the last decade, piles of physical money have been accumulating. To understand why this is happening, we need to go back to Article IV of the 1994 Protocol on Economic Relations (‘Paris Protocol’), which set a framework for determining how many Israeli shekels the PMA can transfer to the Bank of Israel (BoI). While the protocol allows the cap to be annually reassessed by both parties, in practice the BoI has unilateral discretion. The current cap, set at ILS 18 billion annually (ILS 4.5 billion per quarter), has not been revised since 2019.
Simultaneously, the Palestinian Authority is running out of digital shekels due to Israel’s unilateral deductions from PA clearance revenues since 2019. These significantly increased in 2023, and the revenues have been completely withheld since June 2025. The UN estimate that cumulative fiscal deductions and withheld revenues amount to $1.76 billion.
The fate of cash is one of many ways in which the West Bank and Gaza Strip have been ripped apart since the Oslo Accords were signed in 1993. But underlying this separation is the same cause: the ongoing illegal Israeli Occupation. Like all other aspects of Palestinian life, money and cash are part of the occupation story.
About the authors
The authors work together to study processes of financial inclusion and their relationship with locally salient ideas of the good life in Ramallah-Al Bireh, Palestine. Their work includes contributions to the ESRC- funded research project Transforming Financial Inclusion to Finance Inclusive Prosperity in Ramallah, Palestine (ES/W006863/1) and the 2022-3 review of the National Strategy for Financial Inclusion in Palestine (https://www.financialinclusion.ps/item-1678961908), conducted for the Palestine Monetary Authority and Palestine Capital Markets Authority.