Two days before Israel’s general elections, Prime Minister Benjamin Netanyahu proposed using cryptocurrency to evade potential economic sanctions amid growing global isolation. Netanyahu argued that blockchain-based digital currencies could bypass sanctions that might exclude Israel from the international financial system. The Bank of Israel and opposition parties swiftly rejected the plan, calling it reckless and likely to deepen the country’s isolation.
Netanyahu’s proposal comes as Israel faces mounting international backlash over its policies in Gaza and the West Bank. The country has been accused of war crimes and genocide, with over 74,500 Palestinians killed in the past three years. Major economies, including the UK and EU nations, have imposed sanctions on settlement-linked individuals and goods, raising concerns about broader financial restrictions.
While cryptocurrencies like Bitcoin and stablecoins could theoretically facilitate cross-border payments, experts argue they cannot replace traditional banking at scale. Sanctions would still apply to transactions, and financial isolation would demoralize investors and businesses. Over 100 experts and former officials criticized Netanyahu’s plan, warning it could cause irreversible economic damage.
The Bank of Israel dismissed the idea, stating that preserving economic relationships with trade partners is the best approach. Opposition leader Gadi Eisenkot called Netanyahu’s vision a threat to national security, questioning how global companies like Google could conduct business under such conditions.