Apply Now: Supporting Financial Sector Reform and Digital Transformation (Palestine)

Deadline: 31-Aug-2026

The European Commission is supporting a EUR 2 million project to strengthen the Palestinian Monetary Authority and improve financial sector stability, transparency, accountability and digital transformation in Palestine. The project focuses on digital payments, virtual assets, Central Bank Digital Currencies, public-private partnerships for digital financial infrastructure and modernisation of the Supervisory Review and Evaluation Process.

Implemented under the PEGASE Direct Financial Support programmes for 2025 and 2026–2027, the initiative will provide technical assistance, policy guidance and institutional support to the Palestinian Monetary Authority. It aims to modernise financial oversight, strengthen cybersecurity and operational resilience, improve payment systems and expand secure digital financial services.

Programme Overview

The European Commission is supporting a project to strengthen the Palestinian Monetary Authority and enhance the stability and digital transformation of Palestine’s financial sector.

The project is funded under the PEGASE: Direct Financial Support to the Palestinian Authority 2025 and PEGASE: Direct Financial Support to the Palestinian Authority 2026–2027 programmes.

The initiative will support modern oversight practices, secure digital financial innovations and stronger regulatory frameworks.

Funding Available

The project has an EU-funded budget of EUR 2 million.

This funding will support eligible activities and initiatives that strengthen financial sector governance, digital payments, supervisory systems and institutional capacity.

Main Objective

The main objective of the project is to contribute to a stable, transparent, accountable and digitally advanced financial sector in Palestine.

The project aims to:

• Strengthen the Palestinian Monetary Authority
• Improve financial sector stability
• Modernise supervisory practices
• Support secure digital financial innovation
• Strengthen payment systems
• Improve cybersecurity oversight
• Promote financial inclusion
• Enhance consumer protection
• Support regulatory reforms for digital finance
• Improve transparency and accountability in the financial sector

Key Focus Areas

The project focuses on financial sector reform, digital finance and institutional strengthening.

Key focus areas include:

• Digital payments
• Virtual assets
• Central Bank Digital Currencies
• Public-Private Partnerships
• Digital financial infrastructure
• Supervisory Review and Evaluation Process modernisation
• Cybersecurity oversight
• Operational resilience
• Payment system interoperability
• Financial inclusion
• Consumer trust
• Risk-based supervision
• Supervisory technology tools

About the Palestinian Monetary Authority

The Palestinian Monetary Authority is an independent public institution responsible for formulating and implementing monetary and banking policies in Palestine.

It was established under PMA Law No. 2 of 1997 and is supported by Banking Law No. 9 of 2010.

The PMA works to:

• Maintain price stability
• Safeguard the banking sector
• Strengthen financial regulation
• Improve payment systems
• Promote sustainable economic growth
• Support financial sector development

Financial Sector Context in Palestine

The Palestinian financial sector faces several structural and operational challenges.

These include:

• Risks related to correspondent banking relationships
• Liquidity pressures
• Financial sector exposure
• Limited financial inclusion
• Need for stronger regulatory frameworks
• Need for more resilient payment systems
• Growing demand for secure digital financial services

The project responds to these challenges by supporting reform, innovation and stronger oversight.

Why Digital Financial Reform Matters

Digital financial reform is important because modern payment systems and secure digital services can expand access to finance, improve efficiency and strengthen trust in the financial sector.

For Palestine, digital finance can help:

• Improve access to financial services
• Reduce reliance on cash
• Support faster transactions
• Strengthen payment system resilience
• Increase transparency
• Improve financial inclusion
• Support businesses and consumers
• Strengthen regulatory oversight

The project will help ensure that digital financial innovation is safe, inclusive and well regulated.

Existing Digital Transformation Progress

The Palestinian Monetary Authority has already made progress in digital transformation.

Key initiatives include:

• E-Sadad, a platform that enables digital bill payments
• I-Buraq, a platform that supports instant transactions between bank and e-wallet users
• Strengthened payment regulations
• Development of electronic cheque clearing systems
• Improved digital payment infrastructure

The new project will build on these efforts and support further modernisation.

Digital Payments Component

The project will strengthen the resilience, security and adoption of digital payment systems.

This component will support:

• Domestic payment system resilience
• Cross-border payment system interoperability
• Cybersecurity oversight
• Operational resilience
• Consumer trust in digital payments
• Wider adoption of digital payment services
• Improved financial inclusion
• Better digital payment infrastructure

A stronger digital payments ecosystem can help individuals, businesses and institutions access faster and safer financial services.

Virtual Assets and CBDC Component

The project will support regulatory and supervisory work related to virtual assets and Central Bank Digital Currencies.

This component will help assess:

• Risks linked to virtual assets
• Regulatory gaps in digital finance
• Consumer protection concerns
• Financial stability implications
• Cybersecurity and operational risks
• Effects of external Central Bank Digital Currencies
• Future digital financial innovation trends

The goal is to improve preparedness for emerging developments in digital finance.

Public-Private Partnerships Component

The project will promote structured public-private partnerships in digital and financial infrastructure.

These partnerships may involve:

• Banks
• Payment service providers
• Fintech companies
• Financial infrastructure operators
• Public institutions
• Technology providers
• Market stakeholders

Public-private partnerships can support practical solutions for digital payments, infrastructure development and inclusive financial market growth.

Areas Supported Through Public-Private Partnerships

The project will use public-private collaboration to support:

• Digital payment infrastructure
• Merchant adoption of digital payments
• Interoperability solutions
• Inclusive financial market development
• Financial technology innovation
• Secure transaction systems
• Broader access to digital financial services

This approach helps connect regulatory reform with real market implementation.

SREP Modernisation Component

The project will modernise the Supervisory Review and Evaluation Process, also known as SREP.

SREP is a structured supervisory process used to assess the risks, governance, capital adequacy and resilience of financial institutions.

Modernising SREP will help the Palestinian Monetary Authority strengthen risk-based supervision and improve data-driven monitoring.

What SREP Modernisation Will Cover

The SREP modernisation component will focus on integrating new and emerging risks into supervisory assessments.

These include:

• ICT risks
• Cyber risks
• Operational risks
• Third-party risks
• Digital finance risks
• Payment system risks
• Governance risks
• Financial stability risks

The component will also improve the use of supervisory technology tools to support better analysis and monitoring.

Supervisory Technology and Data-Driven Monitoring

Supervisory technology, often called SupTech, refers to digital tools used by regulators and supervisors to monitor financial institutions more effectively.

Under this project, SupTech tools may support:

• Data collection
• Risk monitoring
• Early warning systems
• Financial institution assessment
• Cyber risk oversight
• Operational resilience tracking
• Evidence-based supervision
• Faster supervisory decision-making

This will help the PMA respond more effectively to financial sector risks.

Cybersecurity and Operational Resilience

The project will strengthen cybersecurity oversight and operational resilience in the financial sector.

This is important because digital payments, e-wallets, fintech platforms and online banking services depend on secure systems.

The project will support stronger capacity to identify, assess and manage:

• Cyber threats
• Technology failures
• System disruptions
• Third-party service risks
• Payment infrastructure vulnerabilities
• Digital fraud risks
• Operational continuity challenges

Improved resilience can help protect consumers, businesses and financial institutions.

Financial Inclusion and Consumer Trust

The project will support increased adoption of digital payments by improving consumer trust and financial inclusion.

Financial inclusion means ensuring that individuals and businesses can access useful, affordable and safe financial services.

The project can help improve financial inclusion by supporting:

• Digital payment access
• Safer payment systems
• Wider merchant acceptance
• Better consumer protection
• More reliable digital infrastructure
• Improved trust in formal financial services
• Inclusive market development

Who is Involved?

The project will be implemented through cooperation between EU Member State partners and the Palestinian Monetary Authority.

Implementation will involve:

• Project leaders
• Resident twinning advisers
• Component leaders
• Short-term experts
• Technical specialists
• Policy advisers
• Institutional counterparts

This cooperation model will provide technical assistance and practical support for financial sector reform.

Technical Assistance and Institutional Support

The collaboration will provide support in several areas.

This may include:

• Policy guidance
• Regulatory advice
• Technical assistance
• Capacity building
• Institutional strengthening
• Supervisory reform support
• Digital finance expertise
• Cybersecurity and operational risk guidance
• Implementation support for practical reforms

The aim is to translate policy reforms into concrete institutional and market outcomes.

Expected Results

The project is expected to improve the capacity of the Palestinian Monetary Authority and strengthen Palestine’s financial sector.

Expected results include:

• Stronger financial sector stability
• More modern supervisory practices
• Improved digital payment systems
• Greater payment system resilience
• Enhanced cybersecurity oversight
• Stronger regulatory frameworks for virtual assets
• Better understanding of CBDC implications
• Increased financial inclusion
• Stronger public-private collaboration
• Improved consumer protection
• More effective risk-based supervision
• Better use of supervisory technology tools

Why This Project Matters

This project matters because financial sector stability is essential for economic resilience, public trust and sustainable development.

A stronger Palestinian Monetary Authority can help protect the banking system, improve oversight and support safer financial innovation.

Digital transformation can also expand access to financial services, improve transaction efficiency and support modern economic activity.

By combining institutional reform, digital finance, cybersecurity and public-private collaboration, the project supports a more resilient and future-ready financial sector in Palestine.

How the Project Works

The project will work through structured cooperation, technical assistance and targeted reform support.

Step 1: Strengthen Institutional Capacity

EU Member State partners and experts will work with the Palestinian Monetary Authority to strengthen institutional capacity.

This includes support for policy, supervision, digital finance and operational systems.

Step 2: Improve Digital Payment Systems

The project will support more resilient, interoperable and secure payment systems.

This includes domestic and cross-border payment infrastructure.

Step 3: Support Digital Finance Regulation

The project will help strengthen regulatory frameworks for virtual assets, CBDCs and emerging digital financial innovations.

This will improve preparedness for future financial technology developments.

Step 4: Build Public-Private Partnerships

The initiative will promote cooperation between public authorities, banks, payment service providers, fintech companies and infrastructure operators.

This will support merchant adoption, interoperability and inclusive digital financial services.

Step 5: Modernise SREP

The project will support the modernisation of the Supervisory Review and Evaluation Process.

This will strengthen risk-based supervision and integrate ICT, cyber, operational and third-party risks into supervisory assessments.

Step 6: Improve Cybersecurity Oversight

The project will help improve cybersecurity supervision and operational resilience across financial sector systems.

This will support safer digital financial services.

Step 7: Use Supervisory Technology

The project will support the use of supervisory technology tools for better data-driven monitoring.

This can improve risk detection, analysis and supervisory decision-making.

Step 8: Translate Reforms into Practical Outcomes

The project will combine technical assistance, policy guidance and institutional support to turn reform priorities into operational improvements.

Common Mistakes to Avoid

Applicants or implementing partners should avoid the following mistakes:

• Treating digital finance reform as only a technology issue
• Ignoring cybersecurity and operational resilience risks
• Failing to address consumer protection
• Overlooking the role of financial inclusion
• Underestimating risks linked to virtual assets
• Not assessing the implications of external CBDCs
• Providing weak coordination between public and private actors
• Failing to integrate ICT and third-party risks into supervision
• Using outdated supervisory methods without data-driven tools
• Ignoring market adoption challenges for digital payments

Tips for Strong Implementation

Strong implementation should:

• Align activities with PMA institutional priorities
• Focus on practical regulatory and supervisory improvements
• Strengthen digital payment resilience and interoperability
• Include cybersecurity and operational risk controls
• Promote trust in digital financial services
• Engage banks, fintech companies and payment providers
• Support inclusive access to financial services
• Use data and SupTech tools for better supervision
• Build capacity for virtual asset and CBDC-related risks
• Ensure reforms lead to measurable institutional outcomes

FAQ

1. What is the European Commission project supporting in Palestine?

The project supports the Palestinian Monetary Authority and aims to strengthen financial sector stability, transparency, accountability and digital transformation in Palestine.

2. What is the project budget?

The project has an EU-funded budget of EUR 2 million.

3. Which programmes fund the initiative?

The initiative is implemented under the PEGASE: Direct Financial Support to the Palestinian Authority 2025 and PEGASE: Direct Financial Support to the Palestinian Authority 2026–2027 programmes.

4. What are the main focus areas?

The main focus areas are digital payments, virtual assets, Central Bank Digital Currencies, public-private partnerships for digital and financial infrastructure, and SREP modernisation.

5. What is the Palestinian Monetary Authority?

The Palestinian Monetary Authority is an independent public institution responsible for monetary and banking policies, price stability, banking sector safeguards and sustainable financial sector development.

6. What is SREP?

SREP stands for Supervisory Review and Evaluation Process. It is a supervisory framework used to assess financial institution risks, governance, capital adequacy and resilience.

7. Why are digital payments important for Palestine?

Digital payments can improve access to financial services, support faster transactions, increase transparency, reduce reliance on cash and strengthen financial inclusion.

Conclusion

The European Commission’s EUR 2 million project will support the Palestinian Monetary Authority in strengthening financial sector stability, digital transformation and modern financial supervision.

The initiative focuses on digital payments, virtual assets, CBDCs, public-private partnerships and SREP modernisation.

By improving oversight practices, cybersecurity, operational resilience and digital financial infrastructure, the project will help Palestine build a more transparent, accountable, inclusive and future-ready financial sector.

For more information, visit European Commission.