World Affairs
Bank of Israel rejects Netanyahu’s proposed crypto sanctions workaround
Netanyahu called blockchain one possible response to future banking sanctions and said he had asked for a plan. The Bank of Israel urged political leaders to prevent sanctions and preserve trade ties.
Executive summary
- Central bank pushes back: The Bank of Israel said cryptocurrencies cannot serve as a route around sanctions and urged the political leadership to preserve economic ties with Israel’s main trading partners and focus on preventing restrictions.[1][2]
- Netanyahu said a plan was requested: In an Oct. 23 Channel 10 interview, Benjamin Netanyahu said banking sanctions could be imposed and that he had asked for a plan involving blockchain as one possible alternative. He did not name a currency, agency or timetable.[3][4]
- No public plan details: Ynet reported that officials in economic ministries and senior figures in the Prime Minister’s Office were unaware of a team preparing the proposal. Netanyahu later said crypto was one of several options and might not be used; no banking sanctions were reported as imposed in the coverage reviewed here.[2][5][4]
The Bank of Israel said Saturday that cryptocurrencies cannot be used as a route to bypass sanctions. In its statement, the central bank said Israel should maintain economic relationships with its main trading partners and focus on preventing sanctions and their negative effects. It said responsibility for that effort rests with the political leadership. The statement followed Prime Minister Benjamin Netanyahu’s comments in an interview published the day before.[1][2][5]
The central bank’s response was a public disagreement with a proposal from the country’s political leader. It did not announce a new restriction on digital assets or describe a specific government project. The statement also did not identify a particular country or government it believed might impose financial sanctions.[1][3]
Asked in the Channel 10 interview whether he feared economic sanctions, Netanyahu said banking sanctions could be imposed and that Israel should prepare an alternative economy. When interviewer Roi Katz asked whether blockchain was one possible alternative, Netanyahu said it was and that he had requested a plan. The interview did not specify who would prepare it, which currencies or networks it might involve, or when it would be ready.[3][4]
Ynet reported Saturday that officials in Israel’s economic ministries—and senior officials in the Prime Minister’s Office—were unaware of a team preparing such a plan. That account leaves the proposal’s status unclear; it does not establish whether informal work has begun. Netanyahu later told Channel 14 that crypto was one of several possible means and that it was not certain the government would use it. He said he would consider the central bank’s objections but would act as he thought right.[2][5]
The interview came amid Western measures targeting Israeli settlement-related activity. The Times of Israel reported that Britain and 11 other countries had announced measures focused on goods from settlements in the occupied West Bank. Economists cited by the outlet warned that wider repercussions could reach Israel’s economy, but the reporting reviewed here did not say that Israel’s banks had been subjected to international sanctions.[4][2]
The timing also puts the exchange in the final days before Israel’s Oct. 27 election, according to The Times of Israel. The Bank of Israel did not assess the political consequences of the remarks. Its statement focused on preserving trade relationships and preventing sanctions, while the contents and status of Netanyahu’s requested plan remain undisclosed.[4][1][3]
This archival photograph shows the Bank of Israel’s Jerusalem headquarters in April 2023. It is a context image and does not depict the current statement or any meeting about the proposal. Photographer Ori Parkash released it under the Creative Commons Attribution-ShareAlike 4.0 license; the photograph is reproduced without alteration.[6]