Netanyahu’s election-eve crypto pitch was no offhand remark - +972 Magazine

Prime Minister Benjamin Netanyahu suggested on Channel 10 that Israel should build a parallel economy using cryptocurrency to counter international sanctions. He stated he had already asked for a plan to use blockchain technology as an alternative to the international banking system.

The proposal was met with immediate and sharp criticism. Israeli economists and commentators dismissed the idea as 'outrageous nonsense' and 'delusional,' with over 100 people signing a letter expressing 'grave concern and anxiety.' The Bank of Israel issued a rare statement during Shabbat, declaring that cryptocurrencies cannot be used to circumvent sanctions.

The next day, Netanyahu responded to the criticism, thanking the central bank for its advice but asserting he would do what he thought was right. The prime minister's announcement came just days before the election, raising questions about his true intentions.

Connections to the crypto industry

The prime minister's crypto proposal appears to have roots in his inner circle's long-standing ties to the digital currency industry. One of the most prominent figures is American billionaire Brock Pierce, a pioneer in the field who co-founded Tether, the world's largest stablecoin.

Pierce has met with Netanyahu and other Israeli leaders to brief them on cryptocurrency developments. In 2022, he visited Israel to meet with then-Prime Minister Naftali Bennett and Netanyahu, who was serving as opposition leader.

Further connections have been revealed between Netanyahu's family and the crypto world. Pierce was an advisor to and investor in Bancor, an Israeli cryptocurrency venture. The company's founders included Eyal Herzog, a longtime Netanyahu associate, and Guy and Galia Ben-Artzi, the niece and nephew of Netanyahu's wife, Sara.

In 2023, it was revealed that Netanyahu's son, Yair, had met Pierce in Puerto Rico. Pierce declined to explain how the two became acquainted but said Yair had asked him how he could learn about cryptocurrencies.

Political and financial motives

The crypto industry has become an increasingly influential political force in the United States, with investors and entrepreneurs seeking to translate their financial clout into favorable government policies. Netanyahu's announcement may have been less about offering a credible solution to sanctions and more about courting a potentially valuable constituency.

The plan offers little in the way of a realistic strategy for Israel to evade sanctions. The Bank of Israel's statement emphasized that the right course of action is to maintain economic relations with trading partners and focus on preventing sanctions. The next step for Netanyahu remains unclear, but his crypto pitch has already sparked significant debate.