Three years after Hamas’ attack on Israel and the devastation that followed, Gaza’s cash crisis is easing, not because cash came back but because Gazans learned to live without it.
Most households and major merchants now move money electronically, a shift that matters for anyone tracking Hamas’ finances. The Hamas-run government, curtailed by digital traces, sanctions and seizures, still pays salaries and covers daily expenses in cash.
Since the aftermath of Oct. 7, 2023, Gaza residents have paid steep fees to withdraw cash from their bank accounts. According to interviews and data reviewed by MBN over the last three years, Gazans have endured an acute shortage of physical cash and instead increasingly relied on electronic transfers.
This remained the case even during 2024 and 2025 when fees for converting digital balances into cash through merchants and money changers reportedly topped more than 50% of a transaction’s value, a practice known as takiish in Gazan slang.
Before the war, the Israeli shekel was the most widely used currency in Gaza, available at 56 bank branches and about 90 ATMs, but after October 2023, most bank branches closed, ATMs went dark, and regular channels for bringing cash into the territory were disrupted.
Even before the war, Hamas faced difficulties paying its employees regularly. In July 2023, about 50,000 employees’ salaries were delayed, before the group received part of a Qatari grant and a loan from a local bank.
In March 2024, the Palestinian Monetary Authority said several bank headquarters and branches had been destroyed, with others unable to operate normally due to bombardment, power outages, and compromised security conditions. Most ATMs remained out of service. By the end of that month, all bank branches were closed, and by December 2024, only three ATMs remained partially operational.
Palestinian economist Alhasan Bakr told MBN that the halt in cash transfers in and out of Gaza confined liquidity to money already held by residents and banks, just as demand for cash was surging, and Hamas was not spared the crisis. A financial source in Gaza told MBN that the group paid portions of salaries irregularly and changed its payment mechanisms as the war continued, in some cases resorting to secret cash distributions.
Palestinian Monetary Authority officials said Hamas looted about $180 million out of $290 million from the Bank of Palestine and other financial institutions in Gaza at the beginning of the war.
The Palestine Economic Policy Research Institute, known as MAS, recorded more than $14 million in direct losses to financial-sector facilities, while credit-portfolio losses exceeded $1 billion.
Israel has blocked new banknotes from entering Gaza since the war began, Reuters reported after banks reopened following the October 2025 ceasefire. COGAT, the Israeli Defense Ministry agency that oversees goods entering Gaza, did not immediately respond to Reuters’ questions about whether or when banknotes would be allowed back in. As of late August 2026, reopened branches were still handling mostly administrative transactions without new cash, Al Jazeera reported.
A money changer in Gaza told MBN that Hamas-affiliated officials imposed restrictions on some transactions during the war and exchange offices linked to the group charged high fees on international transfers. After fees, only 350 out of 500 shekels would reach the recipient, he said.
In January 2025, the United Nations estimated that about 1.5 billion shekels (about $420 million) were circulating outside the formal financial system.
But as some banking services and digital applications resumed, things began to change.
On Jan. 28, 2025, the Monetary Authority announced that banking operations had resumed through branches in Deir al-Balah and Nuseirat, while electronic banking services were made available free of charge amid the ongoing cash shortage.
Over time, Hamed Jad, an economist who writes for Al-Ayyam newspaper, said the need for physical currency declined among some segments of the population, particularly as major merchants and importers increasingly relied on electronic transfers.
The Monetary Authority has increasingly shifted all transactions to electronic systems, and it says it has a plan to restore banking operations. However, the continued presence of Hamas, combined with its lack of progress on disarming and withdrawing from Gaza, is a complication.
Still, UNICEF data shows that more than 99% of households monitored between June and August 2026 used digital transfers to receive aid.
In September 2026, the Gaza Chamber of Commerce told the United Nations’ Cash Working Group that fees for obtaining cash in Gaza had fallen to 0%.
However, paper bills remain essential for people without bank accounts, or those who want to avoid the digital traces electronic payments leave. For Hamas, cash remains king given that all digital and electronic transactions involving Palestinian banks are linked to the Central Bank of Israel and are subject to strict oversight.
In August 2026, The Associated Press documented how the Hamas-run Gaza government benefited from money collected on smuggled goods, quoting Mohammed Barbakh of Gaza’s Economy Ministry as saying authorities collect up to 20% of the value of smuggled goods when a merchant reports them, that share rising to 80% when the merchant does not report them and authorities discover the goods themselves.
The agency also quoted two senior Hamas administration officials as saying the money helps finance social services and the salaries of civil servants and police officers, estimating that as much as $100 million had been collected from smuggled goods since the ceasefire in October 2025.
Adapted and translated from the original Arabic.
