Israel's Central Bank Rebukes Netanyahu Plan to Use Crypto to Dodge Sanctions
Israel's central bank has rebuked Prime Minister Benjamin Netanyahu's proposal to use cryptocurrency to bypass potential international sanctions, days before Tuesday's national election.
The Bank of Israel issued a rare public rebuke to Prime Minister Benjamin Netanyahu's suggestion that cryptocurrency could help Israel evade potential international sanctions. The central bank stated clearly that cryptocurrencies cannot serve as a means to circumvent sanctions imposed on Israel, emphasizing that preserving economic relations with trading partners should be the priority.
Netanyahu's Proposal
Netanyahu announced on Friday during a Channel 10 interview that Israel needed to prepare for possible banking sanctions. He revealed he had requested a plan utilizing crypto and blockchain networks as alternatives to bypass such restrictions, though he provided no details about who was developing the plan or which currency or network would be used.
When questioned about the central bank's position, Netanyahu indicated he would consider their input but ultimately do what he believed was best for Israel's economic security.
Economic and Political Backlash
The proposal triggered immediate criticism from economists and political opponents. More than 100 economists, including former Bank of Israel governor Jacob Frenkel and several Nobel laureates, signed a letter warning the plan would lead to higher unemployment and a collapse in foreign investment. They dismissed it as a puzzling solution, one accepted in criminal organizations, that will not help in the slightest.
It's not possible to circumvent sanctions with digital currencies as the blockchain system is publicly open and transparent, which means that every transfer is registered and can be traced to its origin.
Election Context
Netanyahu's political rivals seized on the comments ahead of Tuesday's election. His main challenger, Gadi Eisenkot, dismissed the proposal as madness and dubbed it the BibiCoin policy, suggesting it would drive companies abroad. Opposition leader Yair Lapid compared Netanyahu's bypass economy to those of Iran, Russia and Venezuela.
The controversy comes amid rising international pressure, with countries including the UK, France and Canada announcing or pledging restrictions on trade with Israeli settlements in the West Bank. Opinion polls suggest a possible stalemate in the election, with neither Netanyahu's coalition nor the opposition alliance on course for a governing majority.
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