Just days before Israel’s national election, Prime Minister Benjamin Netanyahu proposed using cryptocurrency and blockchain technology to bypass potential international sanctions, a move that has sparked fierce criticism. The Bank of Israel swiftly rebuked the idea, stating that cryptocurrency “cannot be used as a route for bypassing sanctions.” Despite this, Netanyahu insisted he would proceed with what he believes is best for the country.
Over 100 senior economists, business executives, and former public officials warned that Netanyahu’s plan could lead to irreversible economic damage. The Economists’ Forum, which includes Nobel Prize laureates and former Bank of Israel officials, argued that even acknowledging the need to prepare for sanctions is already harming Israel’s economy. They predicted that foreign investments would vanish, unemployment would surge, and Israel’s global economic standing would collapse.
The warnings come amid growing international pressure over Israel’s policies toward West Bank settlements. The UK recently banned trade with Israeli settlements, and 12 Western countries announced similar plans. Gali Ingber, head of finance studies at the College of Management Academic Studies, noted that Netanyahu’s remarks suggest the government has no intention of changing its policies to prevent sanctions.
Experts argue that cryptocurrency is not a viable solution for bypassing sanctions, as transactions on blockchain networks are transparent and traceable. Ingber emphasized that Israel, as an advanced economy reliant on international trade and foreign investment, cannot simply replace global financial connections with an alternative system. The high-tech sector, which contributes about 20% of Israel’s GDP and 50% of total exports, would be severely impacted if sanctions were imposed.