As bloomberg.com reported, a sharp reprimand from the central bank was triggered after Prime Minister Benjamin Netanyahu suggested leveraging cryptocurrency to evade potential monetary sanctions on Israel. Speaking four days before the Knesset election in an interview with the Channel 10 economic network, Netanyahu stated that the country must prepare for incoming international penalties by establishing alternative payment channels.
Sanctions Spark Alternative Finance Debate
The prime minister’s remarks followed an announcement from Britain and 11 other Western countries regarding sanctions targeting goods from Israeli settlements in the West Bank. As reported by The Times of Israel, Netanyahu’s right-wing government approved massive settlement construction and a wave of settler attacks on Palestinians, prompting these measures in response. While those initial UK-led restrictions officially targeted specific settlements, local economists warned that the economic fallout could easily spread into Israel proper. Netanyahu defended his stance during the interview, remarking, You have to understand that there could be banking sanctions,
and adding, It’s just a matter of time.
He confirmed that he has already asked officials to design a workaround plan utilizing blockchain technology.
Bank of Israel Rejects Digital Currency Proposal
The Bank of Israel swiftly rejected the digital currency proposal, releasing a statement on Saturday that declared blockchain assets cannot be used as a way to circumvent sanctions on Israel.
The central bank added that The right thing for Israel’s economy is to maintain economic relations with our main trading partners and focus on preventing sanctions and their negative impact on the economy.
According to KAN News, Netanyahu sarcastically thanked the bank for the advice. Political opponents also seized on the interview. Yashar party chairman Gadi Eisenkot released a campaign video on X describing the plan as an admission that the prime minister had economically destroyed the country.
Eisenkot’s campaign warned that the alternative system would generate an economy like North Korea and Iran,
resulting in the end of high-tech, the end of healthcare, the end of security,
and asked, We must not let him (Netanyahu) burn through our savings.
B’Yachad chairman Naftali Bennett echoed those concerns, arguing that the strategy would cause the destruction of Israeli high-tech, the loss of livelihood for hundreds of thousands of Israelis, and the collapse of our national security.
Golan, another political figure, slammed the remarks by writing, The man has lost it,
and urged the government to fight Jewish terrorism that is destroying our standing in the world.
Meanwhile, a senior Israeli economic official quoted by Channel 12 criticized the proposal directly, stating, The idea will certainly not achieve its goal.
Prominent Economists and Tech Leaders Blast Crypto Plan
Public pushback widened significantly when a letter signed by 109 prominent figures—including 2025 Nobel Prize in Economic Sciences winner Professor Joel Mokyr and Nobel laureate in chemistry Professor Aaron Ciechanover—blasted the crypto sanctions plan, Ynetnews reported. Former budget directors David Boaz and Udi Nissan, alongside Israeli Academy of Sciences President David Harel and prominent tech figures such as Check Point co-founder Marius Nacht, CyberArk co-founder Alon Cohen, Dov Moran, and Gigi Levy-Weiss, also signed the warning. The signatories wrote that Israel’s banking system, companies, exporters and investors, foremost among them the high-tech sector, the economy’s engine of growth, will be unable to function,
adding that Unemployment will soar, foreign investment will disappear entirely, and Israel’s economic standing in the world will collapse.
Condemning the proposal as a solution used by criminal gangs,
the letter’s authors accused Netanyahu of demonstrating a fundamental lack of understanding and ignorance in the face of Israel’s collapsing standing in the international arena.
Nir Hirshman, CEO of the Crypto Companies Forum, noted that while interest in digital assets is notable, public blockchain networks remain transparent and allow transactions to be tracked, pointing out that they are not tools designed to conceal money transfers.
Global Restrictions Mount Amid Defense Budget Disputes
Data from the Jewish People Policy Institute database highlights a growing tally of international restrictions against Israel, recording 121 restrictive measures across 62 countries, which include 40 financial actions, according to Ynetnews. UA.News reported that these recorded measures include 15 in the United States, 10 in Spain, eight in the United Kingdom, seven in Turkey, and five in Belgium, with several US initiatives involving legislative proposals to restrict arms and defense equipment sales. Alongside these diplomatic pressures, Netanyahu dismissed warnings from Bank of Israel Governor Amir Yaron regarding the escalating burden of defense spending, stating that he unequivocally disagreed with the central bank chief’s assessment of the national budget.
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