Crypto Adoption Around the World: Syria

Syria

Economic Situation in Syria 

Source: Freepik 

The conflict in Syria has been ongoing for over twelve years, causing a lot of pain and destruction for its people and economy. More than half of Syria's population, which was around 21 million before the war, has been forced to leave their homes, either staying within the country or becoming refugees in neighboring countries.

The war has damaged buildings and roads, taken many lives, and led to a collapse of the economy. Syria's economy shrank by more than 50% from 2010 to 2020. Because of this, the World Bank classified Syria as a low-income country starting in 2018.

From 2011 to 2016, Syria lost about $226 billion in total economic output, which is roughly four times what it made in 2010. The economic losses were 20 times worse than the physical damage, making it harder for the country to recover over time.

Syria’s healthcare system has been severely impacted by years of fighting, and the COVID-19 pandemic made things even worse. In 2022, rising fuel prices and expensive goods, partly due to the war in Ukraine, reduced how much families could afford.

Agriculture also suffered, with bad wheat crops in 2021 and still low production in 2022 due to drought and shortages. This has made Syria one of the ten most food-insecure countries in the world.

In 2023, the economy got worse again, with economic activity declining by 1.2% compared to the previous year, especially near the western borders where trade fell. Oil production also dropped by 5.5% due to damage from earthquakes and ongoing fighting.

While farming improved in 2023 thanks to better weather, the ongoing conflict still hurt the agricultural sector by displacing farmers and hurting their resources, leading to lower crop yields.

The war has affected foreign trade, making Syria more dependent on imports. The value of the Syrian pound fell by 141% against the US dollar, and prices for everyday goods went up by 93%, worsened by cuts to government support. As the economy slowed down, government income fell, leading to more cuts in spending and support programs.

The Spring 2024 Syria Economic Monitor predicts more economic troubles in 2024, with a real GDP expected to drop by 1.5% after a 1.2% decline in 2023. People’s buying power will stay low because of rising prices, and private investments will struggle due to security problems and economic uncertainty. 

High inflation is likely to continue, driven by currency drops and potential cuts to food and fuel support. The 2024 budget will show ongoing cuts to support for essential goods.

Current State of Cryptocurrency Adoption in Syria 

Source: Freepik

The Syrian Center for Economic Research (SCER) has proposed legalizing Bitcoin and creating a digital version of the Syrian pound. This is a bold initiative aimed at addressing the country’s economic struggles. 

According to the World Bank, the economy has shrunk by over 60% since 2010. It could help control inflation, stabilize the currency, and attract foreign investments if implemented successfully. Given Syria’s current challenges with rising prices and a weakening currency, this proposal could bring significant changes to the country’s financial system. 

This proposal aims to address Syria’s economic struggles by allowing Bitcoin trading, mining, and exchange under clear regulations that align with local and international standards. The plan also includes digitizing the Syrian pound by backing it with assets like gold and reserves. 

This digital currency would be monitored by the central bank and other regulatory bodies to ensure stability and security. If successful, this move could help control inflation, strengthen the currency, and attract foreign investments, offering a new financial direction for Syria.

Beyond economic stability, this plan also aims to support Syrian entrepreneurs and innovators. The proposal also seeks to improve property rights and give people full control over their digital assets, while modernizing financial institutions to keep up with global trends

However, the proposal faces major challenges, such as a lack of advanced technology, limited public awareness, and geopolitical issues that have slowed Syria’s recovery. Using blockchain for banking and finance also comes with risks like regulation, security, and proving ownership of assets. 

In areas with poor infrastructure, setting up legal systems to prevent conflicts is extremely difficult. The SCER has made it clear that the transitional government has not approved or considered this proposal, and they do not expect it to be implemented anytime soon. 

They also emphasized that the plan is not meant to bypass international sanctions but rather to help stabilize the economy through legal means.

Interestingly, to aid humanitarian efforts in Syria, Chainanalysis reports that cryptocurrencies are used for donations to provide relief and support the local population. 

Crypto Law in Syria

Source: Freepik

Cryptocurrencies are largely unregulated in Syria. They are not recognized as legal tender nor is there a ban on the use of digital assets.  

In fact, the Syrian Center for Economic Research (SCER) has unveiled a bold proposal to incorporate Bitcoin into the nation’s financial system.

On December 31, 2024, the founder of the Arabic crypto channel Bitcoin 21, Bam,  shared the SCER’s proposal on his social media platform stating: 

This proposal aims to address Syria’s economic struggles by allowing Bitcoin trading, mining, and exchange under clear regulations that align with local and international standards. 

Factors Driving Crypto Adoption in Syria 

Source: Freepik

Economic problems, limited access to banking, and the need for international transactions are pushing some Syrians to use digital currencies. Below are the main factors driving crypto adoption in Syria.

Inflation and Currency Devaluation

The Syrian pound has lost much of its value, making it difficult for people to save money. Cryptocurrencies like Bitcoin provide a way to store value without worrying about the instability of the Syrian Pound..

International Transactions and Remittances

Many Syrians rely on money sent by family members abroad. However, international sanctions and banking restrictions make it hard to receive funds. Cryptocurrency allows people to send and receive money quickly and with lower fees.

Growing Digital Awareness

More people in Syria are learning about digital currencies through social media and online platforms. As awareness grows, more individuals and businesses are exploring crypto as an option for payments and investments.

Peer-to-Peer Transactions

Since many global exchanges do not support Syria, people are using peer-to-peer (P2P) platforms to trade cryptocurrencies directly. This allows them to bypass banking restrictions and access digital assets.

Challenges to Cryptocurrency Adoption in Syria

Source: Freepik

Cryptocurrency is gaining popularity worldwide, but in Syria, it faces many obstacles. Economic struggles, government restrictions, and a lack of public awareness make it difficult for people to use digital currencies. Below are some of the key challenges to crypto adoption in Syria.

Government Restrictions

The Syrian government has strict rules on financial transactions, and cryptocurrency is not officially recognized. Many banks and financial institutions do not support crypto exchanges, making it hard for people to buy or sell digital currencies.

Financial Sanctions and Global Restrictions

Syria faces international sanctions, which limit financial transactions with other countries. Some global cryptocurrency platforms and exchanges may not be opened to Syrian users, making it harder to trade or invest in crypto.

Low Awareness and Education

Most people in Syria are not familiar with how cryptocurrency works. There is little education about digital currencies, and many people do not trust or understand how to use them safely.

Economic Instability

Syria’s economy has been weakened by war and inflation. Many people struggle to afford basic necessities, so investing in cryptocurrency is not a priority. The unstable value of the local currency also makes crypto transactions more complicated.

Cybersecurity Risks

Cryptocurrency transactions require secure online platforms, but cybercrime is a major concern. Without strong cybersecurity measures, people may be at risk of scams, hacking, and losing their money.

Crypto Usage in Different Sectors in Syria

Source: Freepik

Despite many challenges people and businesses are turning to crypto for various purposes, including online trade, remittances, and investment. Below are the key sectors where crypto is being used.

Remittances and Money Transfers

A large number of Syrians rely on money sent by family members living abroad. Due to international sanctions, traditional money transfer services can be slow and expensive. Cryptocurrency allows for faster and cheaper cross-border transactions.

Investment and Trading

People in Syria are using crypto as an investment option to protect their money from inflation. Some trade cryptocurrencies to earn profits, while others hold digital assets as a way to store value.

NGOs and Humanitarian Aid

Some international organizations use cryptocurrency to send aid to people in need. Since banking restrictions make it hard to transfer money, crypto allows for direct transactions without middlemen.

Online Business and Freelancing

Many Syrians work online as freelancers, offering services like graphic design, programming, and writing. Since international payments are difficult due to banking restrictions, many freelancers receive payments in cryptocurrency.

Community-Led Fundraising

Some Syrian campaigns and communities use cryptocurrency to collect donations and raise funds for local projects, such as rebuilding homes, supporting families in need, covering medical expenses, and even supporting the war. 

Some Syrians have managed to create accounts on foreign platforms, and some HTS fighters were tracked using cryptocurrency to raise money to support the war. Crypto enables faster transactions and avoids high fees associated with traditional banking systems.

Conclusion 

Cryptocurrency is slowly making its way into Syria, offering new opportunities for individuals and businesses despite economic and political challenges. It provides an alternative for financial transactions, investment, and even humanitarian aid. 

However, its widespread adoption depends on better infrastructure, clearer regulations, and increased public awareness. While the SCER’s proposal presents an ambitious vision, it remains uncertain if or when it will become a reality. 

For now, crypto continues to grow as a financial tool for Syrians looking for stability in uncertain times.