Birzeit University economist questions the timing and motives behind the proposed “cash-use reduction” law, warning it may align with Israeli regulations and undermine financial inclusion.
Al-Raqeeb Exclusive – Dania Abdelfattah
At a time when the Palestinian Monetary Authority is promoting the draft “Cash-Use Reduction Law” as a necessary step to modernize the financial system and confront the liquidity crisis, prominent economic voices are warning of serious consequences. In an exclusive statement to Al-Raqeeb, Dr. Tareq Ashour, economics professor at Birzeit University, argues that the law is “ill-timed” and driven by requirements that do not serve the national economy—warning that it could turn Palestinians into “guards of Israeli laws.” This critical view opens the door to wide-ranging questions about the true motives behind the law, its impact on the financial inclusion strategy, and the future of the Palestinian economy.
While discussions continue behind closed doors about a law intended to reduce cash-based transactions, serious concerns are surfacing that the step may be rushed and serving agendas not necessarily aligned with the interests of the national economy. Although the Palestinian Monetary Authority insists that the goal is to confront challenges such as the surplus of Israeli shekels and pressure on the banking sector, experts see the issue from a very different angle.
“We don’t need it now”
Speaking to Al-Raqeeb, Dr. Ashour raises major questions about the timing and usefulness of the draft law. “As a Palestinian economist, I see that this proposed law is not timely and carries consequences that do not serve the national economy,” he said.
He explained that the draft law was introduced based on “requirements unrelated to Basel regulations,” which govern global banking practices. “And although cash ceilings exist worldwide for the purposes of combating crime and money laundering, the situation in Palestine is entirely different,” he added.
“Guards of Israeli laws”?
Dr. Ashour revealed a more alarming dimension, arguing that the law in its current form could make Palestinians enforcers of Israeli policies. He noted that “this law is intended to make us guards of Israeli laws in this field, especially following Israel’s announcement of lowering its own cash-transaction ceiling.”
This point shifts the discussion from a technical matter to one with deep sovereign and economic implications. According to Ashour, the law could “criminalize cash transactions between Palestinian citizens” based on standards that do not match the realities of the Palestinian context.
A blow to financial inclusion and the rise of a parallel market
Dr. Ashour highlighted a paradox: the new law could undermine years of steady work. “It will undo major efforts undertaken by the Palestinian Monetary Authority in recent years under the financial inclusion strategy,” he warned, adding that it could “encourage the emergence of a parallel market outside the formal banking sector.”
This means that instead of adopting digital channels, citizens and merchants may resort to informal solutions to avoid restrictions and fees—expanding the shadow economy rather than integrating it.
“Undemocratic democracy”
Dr. Ashour also criticized the consultation process around the draft law, calling it opaque: “National dialogues are usually public. This is the first time we see a national dialogue conducted through the submission of written comments—with no one knowing which comments will be adopted and which will be ignored.” He concluded that this mechanism is “an attempt to give the law legitimacy through a democracy that is not truly democratic.”