E-shekels across borders: a distributed ledger system to settle payments between Israel and the West Bank

Beginning in 2016, Israeli banks announced their intention to sever correspondent ties with their counterparts in the West Bank, citing risks around money laundering and terror financing. This paper contributes to the discussion about how to save Palestinian/Israeli transactions by proposing a private, permissioned distributed ledger system, jointly owned by the Palestinian and Israeli central banks, where Israeli and Palestinian banks can exchange e-shekels to settle payments.