Israel
Bank of Israel says crypto cannot shield economy from sanctions, contradicting Netanyahu
By Jewish Life Staff, . Jewish Life.
Israel's central bank and more than 100 senior economic figures pushed back sharply this week against Prime Minister Benjamin Netanyahu's suggestion that cryptocurrency and blockchain technology could protect Israel's economy from international sanctions.
What Netanyahu said
Speaking to Channel 10 on Friday, Netanyahu told Israelis they should prepare for the possibility of banking sanctions, according to The Jewish Chronicle and Jewish Insider. He said he had already asked for plans to use cryptocurrency as part of an alternative financial system. Jewish Insider reported that he also told the Channel 10 audience that U.S. military aid "won't keep coming because America has changed … it's just a matter of time."
After criticism mounted, Netanyahu told Channel 14 that "crypto is one of the means, it is not the only one and I am not sure we will use it," Jewish Insider reported. He added: "I hear the opposition and take it into consideration," while saying he continued to do "what I think to continue Israel's great economic flourishing."
The central bank's response
The Bank of Israel issued a statement on Saturday night rejecting the cryptocurrency element of the plan. "Cryptocurrency cannot be used as a route to circumvent sanctions," the bank said, as quoted by Jewish Insider. "The correct thing for Israel's economy is to preserve economic relations with its main trading partners and to focus on preventing sanctions and their negative influence on the market."
The Jewish Chronicle reported the bank added that preventing sanctions was a matter for the "political echelon," which "should act to advance it."
What economists warned
The joint statement carried 109 signatures, The Jerusalem Post reported, drawn from economics, business, the high-tech industry and former senior government roles. The signatories included two Nobel Prize laureates: Prof. Joel Mokyr in Economics and Prof. Aaron Ciechanover in Chemistry, the Post said. The Jewish Chronicle reported the group also included a former Bank of Israel governor.
The statement accused Netanyahu of "knowingly leading the State of Israel toward an international economic boycott and isolation," describing the cryptocurrency proposal as "a bizarre solution commonly used by criminal organizations that will be of no help whatsoever," according to the Post.
The group warned that banking restrictions would cause unemployment to surge, wipe out foreign investment and paralyze the high-tech sector, which drives much of Israel's growth. Everyday consequences, the signatories said, would include Israelis losing access to credit cards, being blocked from platforms such as Amazon and AliExpress, and facing shortages of medicines and medical equipment as foreign workers left the country.
Political reaction
Gadi Eisenkot, chairman of the Yashar party and a former chief of the Israel Defense Forces, released a campaign video on X calling the plan "Bibicoin" and saying it would "destroy Israel," the Post reported separately. The video claimed the alternative economy would produce conditions "like North Korea and Iran" and mean "the end of high-tech, the end of healthcare, the end of security."
In a separate post on X, Eisenkot wrote that Netanyahu "himself admits that the policy he's leading and wants to lead Israel toward will result in international isolation and economic sanctions that will shake the economy and the market," the Post reported.
Jewish Insider noted that Netanyahu's remarks drew criticism from economists, sanctions experts and political opponents, and that the election was set for Tuesday. Netanyahu told Channel 14 he had received advice from many places, including the Bank of Israel, and separately pointed to Brazil and other Latin American countries as economies seeking to expand ties with Israel.
Sources
1. Netanyahu's crypto plan could cause 'irreversible damage' to Israeli economy, business leaders warn, jpost.com
2. 'Bibicoin will destroy Israel': Eisenkot slams Netanyahu's crypto plan for alternative funding, jpost.com
3. Bank of Israel rejects Netanyahu's claim crypto could help evade financial sanctions, thejc.com
4. Bank of Israel rejects Netanyahu's suggestion to circumvent sanctions with cryptocurrency, jewishinsider.com