Israeli Prime Minister Benjamin Netanyahu has proposed using blockchain technology and cryptocurrencies as a way to avoid potential financial sanctions, sparking debate ahead of the country’s elections on October 27. In a Friday interview with Israel’s Channel 10 economic network, Netanyahu described blockchain as an “alternative to sanctions” and a “national strategic tool.” This marks a shift in the government’s approach to digital currencies, moving from viewing them as an investment opportunity to a potential part of Israel’s economic defense strategy.
The prime minister’s comments came as a dozen Western countries announced sanctions targeting goods from Israeli settlements in the West Bank. Economists and industry figures have warned that these sanctions could extend to Israel itself, prompting Netanyahu’s exploration of blockchain solutions. However, his proposal has faced swift backlash from political opponents and financial authorities. Gadi Eisenkot, leader of the Yashar party, criticized the idea on X, calling it a “threat to national security” and mocking it as “BibiCoin.” The Bank of Israel also rejected the plan, stating that cryptocurrencies “cannot be used as a route for bypassing sanctions.”
Public reaction to Netanyahu’s statement was sharp, with critics at an anti-government rally in Tel Aviv expressing skepticism. One attendee, Aryeh Cohen, argued that relying on blockchain would make Israel “no better than our enemies,” while another, Pnina, questioned the legitimacy of such a system. Media commentators also weighed in, with Yediot Ahronot columnist Nadav Eyal noting that digital currencies cannot replace a national financial system or persuade foreign companies to violate sanctions. Ben Samocha, founder of CryptoJungle, echoed these concerns, pointing out that blockchain investigations can track and freeze illicit funds, as seen in U.S. actions against Iran.
The debate highlights the growing tension between Israel’s political leadership and financial authorities over the role of cryptocurrencies in the country’s economy. As the election approaches, Netanyahu’s proposal is likely to remain a contentious issue, with critics arguing that it undermines traditional financial systems and exposes Israel to further scrutiny.