Netanyahu floats use of blockchain as solution to potential financial sanctions
Israeli Prime Minister Benjamin Netanyahu said on Friday that the country could turn to cryptocurrency to avoid potential international financial sanctions, calling blockchain a 'national strategic tool'.
The proposal comes amid a wave of sanctions announced by a dozen Western countries targeting goods from Israeli settlements in the West Bank.
Economists and industry figures warned that these measures could extend to Israel proper, prompting the prime minister to explore alternative financial channels.
Netanyahu told Israel’s Channel 10 economic network that blockchain is an 'alternative to sanctions'.
Political and financial backlash
The statement has drawn swift and strong condemnation from across the political spectrum.
Gadi Eisenkot, leader of the Yashar party, called the idea a 'threat to national security'.
The BibiCoin vision is a threat to national security.
The Bank of Israel also rejected Netanyahu’s proposition, stating that cryptocurrencies cannot be used as a route for bypassing sanctions.
Critics in the media and at a Saturday evening rally in Tel Aviv echoed these concerns.
One attendee, Aryeh Cohen, said an economy that runs on the dark web makes Israel no better than its enemies.
Experts question effectiveness
Industry experts argue that digital currencies are not a substitute for a national financial system.
They do not provide credit lines to banks or replace international capital markets.
Furthermore, they cannot persuade foreign companies to violate sanctions that bar them from doing business with Israel.
Crypto & blockchain-based solutions are not the tool for bypassing sanctions.
Samocha pointed to the US Treasury’s success in tracking illicit funds and blocking their fiat gateway as evidence of the limitations of using crypto to evade sanctions.
He concluded that the Israeli economy is not fit to bypass sanctions using crypto.
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