Palestinians hope to launch e-currency in five years

A Bitcoin (virtual currency) hardware wallet and coins are seen in an illustration photo taken at La Maison du Bitcoin in Paris, France, in this May 27, 2015 file photo. (Reuters)
Updated 13 May 2017

Palestinians hope to launch e-currency in five years

NICOSIA: Palestinian officials are planning for the territory to have its own digital-only currency within five years, a move designed to safeguard against potential Israeli interference, the head of the Palestine Monetary Authority (PMA) told Reuters.
Palestinians have no currency of their own and use the euro, US dollar, Israeli shekel and Jordanian dinar in their daily lives. But with limited control over money supply and ultimately, inflation, authorities are mulling a bitcoin-style solution, Azzam Shawwa said.
“That is something we would like to see,” Shawwa said. “It will be called the Palestinian pound.”
Bitcoin is a global digital currency and payment system.
Shawwa spoke to Reuters on the sidelines of the annual meeting in Cyprus of the European Bank for Reconstruction and Development (EBRD). The EBRD said during the meeting it would start investing in the West Bank and Gaza via donations.
The PMA says on its website that it aimed to become a “full-fledged and modern central bank” for an independent Palestine.
But it is unclear how the planned e-pound would skirt the 1994 Paris Protocol agreement, which gave the PMA the functions of a central bank but without the ability to issue currency. The protocol recommended the use of the shekel and gave Israel an effective veto over a Palestinian currency.
There are practical reasons why Palestinians might consider a digital currency. The authority has no money-printing facilities of its own so all cash and coins currently come in from elsewhere.
“If we print currency, to get it into the country you would always need clearance from the Israelis and that could be an obstacle,” Shawwa said. “So that is why we do not want to go into it.”


Japan’s households tighten purse strings as sales tax and typhoon hit

Updated 06 December 2019

Japan’s households tighten purse strings as sales tax and typhoon hit

  • Falls in factory output, jobs and retail add to fears of worsening slowdown after Tokyo unveils $122bn stimulus package

TOKYO: Japanese households cut their spending for the first time in almost a year in October as a sales tax hike prompted consumers to rein in expenses and natural disasters disrupted business.

Household spending dropped 5.1 percent in October from a year earlier, government data showed on Friday.

It is the first fall in household spending in 11 months and the biggest fall since March 2016 when spending fell by 5.3 percent. It was also weaker than the median forecast for a 3 percent decline.

That marked a sharp reversal from the 9.5 percent jump in September, the fastest growth on record as consumers rushed to buy goods before the Oct. 1 sales tax hike from 8 percent to 10 percent.

“Not only is the sales tax hike hurting consumer spending but impacts from the typhoon also accelerated the decline in the spending,” said Taro Saito, executive research fellow at NLI Research Institute.

“We expect the economy overall and consumer spending will contract in the current quarter and then moderately pick up January-March, but such recovery won't be strong enough.”

Household spending fell by 4.6 percent in April 2014 when Japan last raised the sales tax to 8 percent from 5 percent. It took more than a year for the sector to return to growth.

Compared with the previous month, household spending fell 11.5 percent in October, the fastest drop since April 2014, a faster decline than the median 9.8 percent forecast.

Analysts said a powerful typhoon in October, which lashed swathes of Japan with heavy rain, also played a factor in the downbeat data. Some shops and restaurants closed during the storm and consumers stayed home.

Separate data also showed the weak state of the economy.

The index of coincident economic indicators, which consists of a range of data including factory output, employment and retail sales data, fell a preliminary 5.6 points to 94.8 in October from the previous month, the lowest reading since February 2013, the Cabinet Office said on Friday.

It was also the fastest pace of decline since March 2011, according to the data.

Real wages adjusted for inflation, meanwhile, edged up for a second straight month in October, but the higher levy and weak global economy raise worries about the prospect for consumer spending and the overall economy.

While the government has sought to offset the hit to consumers through vouchers and tax breaks, there are fears the higher tax could hurt an economy already feeling the pinch from global pressures.

Japan unveiled a $122 billion fiscal package on Thursday to support stalling growth and as policymakers look to sustain activity beyond the 2020 Tokyo Olympics.

A recent spate of weak data, such as exports and factory output, have raised worries about the risk of a sharper-than-expected slowdown. The economy grew by an annualized 0.2 percent in the third quarter, the weakest pace in a year.

Analysts expect the economy to shrink in the current quarter due to the sales tax hike.