In this thesis, a novel method for current sensing using an FBG-assisted Phase-Sensitive Optical Time Domain Reflectomter (Phase-OTDR) with Mach-Zehnder Inter-ferometer is proposed. The detrimental effect of the intrinsic linear birefringence of the sensing fiber is solved by calibration. An FBG pair is written at the two ends of the spun fiber coil to eliminate phase fading and increase the measurement accuracy. A simulation tool was developed to study the feasibility of the approach and the sensor performance by a well-established Phase-OTDR model with the Jones formalism. The effects of bending-and FBG-induced linear birefringence are investigated as well as the impact of the detector noise.