Bank of Israel rejects Netanyahu’s suggestion to circumvent sanctions with cryptocurrency - Jewish Insider
Israel’s central bank rejected Prime Minister Benjamin Netanyahu’s proposal to use cryptocurrency to bypass international sanctions, warning that such a move would harm the economy.
Netanyahu told Israel’s Channel 10 that Israel must prepare to circumvent sanctions by organizing its economy, and said he had started preparing plans to use cryptocurrency.
He also warned that U.S. military aid would not keep coming because America has changed, and that it is only a matter of time.
The Bank of Israel responded on Saturday night, stating that cryptocurrency cannot be used as a route to circumvent sanctions.
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.
Economic experts warn of collapse
More than 100 senior Israeli economic figures, including former Bank of Israel presidents and Nobel Prize winner Joel Mokyr, signed a letter expressing deep anxiety over Netanyahu’s remarks.
They warned that economic sanctions would utterly destroy the model that allows Israel to exist as a modern and advanced market, harming banks, companies, exporters and investors.
The group predicted that unemployment would rise, foreign investments would stop, and the average Israeli would no longer be able to shop on Amazon or AliExpress.
Economic sanctions would utterly destroy the model that allows Israel to exist as a modern and advanced market.
Clarification and context
Following the criticism, Netanyahu clarified in an interview with Channel 14 that crypto is one of the means, not the only one, and that he is not sure Israel will use it.
He said he hears the opposition and takes it into consideration, and that he received advice from many places, including the Bank of Israel.
Netanyahu also addressed the Bank of Israel’s criticism, saying that for three years he has worked to block and prevent sanctions.
He repeated recent statements that Brazil and other countries in Latin America want to grow their economic ties with Israel.
The Israeli economy is largely reliant on exports, especially of technology, for which it is paid in dollars, and much of its pension funds are invested abroad.
The Bank of Israel holds large foreign currency reserves tied to Western financial systems.
Economies that have used blockchain and cryptocurrency to circumvent sanctions include Russia, Iran and North Korea, but the U.S. has been able to block hundreds of millions of dollars in transactions.
Finance Minister Bezalel Smotrich’s office declined to comment on Netanyahu’s remarks.
Mark Dubowitz, CEO of the Foundation for Defense of Democracies, expressed skepticism about Netanyahu’s plans.
Related
