Netanyahu Considering Crypto Plan to Dodge Banking Sanctions on Israel

Israeli Prime Minister Benjamin Netanyahu has revealed he has asked for a plan to use cryptocurrency and blockchain networks to help Israel navigate potential banking sanctions. The announcement came during an interview on Israel's Channel 10 television, just four days before the country's national election.

Netanyahu expressed confidence that U.S. military funding for Israel will eventually cease, stating it's "only a question of time" before Israel stops receiving tens of billions of dollars in American assistance for its defense budget. The current $3.8 billion-a-year U.S. defense aid agreement is set to expire in September 2028.

Global Precedents

If implemented, Israel would join several other nations that have explored cryptocurrency as a way to bypass financial restrictions. Venezuela, Iran, Russia, and North Korea have all utilized crypto to move funds outside of American financial oversight.

Venezuela's approach, under President Nicolas Maduro, involved creating a legal framework around cryptocurrency use, employing Tether and Bitcoin to sustain its oil industry, and developing the Petro cryptocurrency to move away from the SWIFT banking system. Russia attempted a similar strategy with A7A5, a ruble-pegged token that moved approximately $102 billion in its first year before sanctions and a hack reduced its daily volume by 96%.

Growing International Pressure

The move comes amid increasing international pressure on Israel following the war in Gaza. A UN commission of inquiry concluded in September 2025 that Israel was committing genocide there, while the International Criminal Court issued arrest warrants in November 2024 for Netanyahu and former defense minister Yoav Gallant over alleged war crimes.

More than 60 Israeli economists and former officials have warned that measures targeting West Bank settlements could spread to the wider economy, raising living costs. The U.K. has already banned imports from Israeli settlements, with France, Canada, and ten other countries announcing similar restrictions.

Post-Trump Planning

Netanyahu also addressed concerns about a potential change in U.S. leadership, stating that "there has never been a president as friendly to Israel as Trump, and there may never be another like him." He emphasized the need for Israel to prepare for a "rainy day" by achieving independence in weapons production.

While naming India's Prime Minister Narendra Modi as a potential alternative partner for cooperation, Netanyahu acknowledged the challenges of using crypto as a sanctions evasion tool. Blockchains are public and traceable, and Israel has already demonstrated its ability to sanction crypto wallets, having frozen 37 wallets holding over 24 million shekels linked to Iran's Revolutionary Guards.

Israelis will vote on October 27, with the U.S. military aid agreement set to expire just before the next American presidential election in 2028. Netanyahu's crypto plan represents Israel's preparation for a significant shift in its geopolitical and financial landscape.