Israel's central bank has firmly rejected Prime Minister Benjamin Netanyahu's proposal to use cryptocurrency as a way to bypass potential international sanctions. In a statement on Saturday, the Bank of Israel said cryptocurrencies 'cannot serve as a means to circumvent sanctions imposed on Israel.' The bank emphasized that maintaining economic relations with key trading partners and preventing sanctions should be the priority.
Netanyahu had suggested in a Channel 10 interview on Friday that Israel should explore blockchain-based solutions to prepare for possible banking sanctions. He did not specify which cryptocurrency or network would be used. However, the central bank's rebuke came just days before Tuesday's national election, adding political tension to the debate.
Over 100 economists, including former central bank governor Jacob Frenkel and several Nobel laureates, warned that Netanyahu's plan could harm Israel's economy. They argued that the proposal would lead to higher unemployment and a collapse in foreign investment, calling it 'a puzzling solution, one accepted in criminal organizations, that will not help in the slightest.'
Opposition leaders quickly seized on the comments, with challenger Gadi Eisenkot dismissing the idea as 'madness' and labeling it 'BibiCoin policy.' Opposition leader Yair Lapid compared Netanyahu's 'bypass economy' to those of Iran, Russia, and Venezuela. Economists also questioned the feasibility of using cryptocurrencies to evade sanctions, noting that blockchain systems are transparent and traceable.