Netanyahu Says Israel Weighs Crypto, Blockchain to Counter Potential International Sanctions

Israeli Prime Minister Benjamin Netanyahu said Israel is considering the use of blockchain technology and cryptocurrencies as a way to respond to international financial sanctions.

Cointelegraph reported on October 25 that Netanyahu said in an October 23 interview with Israel's Channel 10 that his government was reviewing ways to use blockchain technology and cryptocurrencies to prepare for potential international financial sanctions. Calling blockchain "an alternative to sanctions," he raised the possibility of using it as a national strategic tool.

Recently, 12 Western countries announced sanctions on products tied to Israeli settlements, citing attacks by Jewish settlers on Palestinians and the expansion of settlements in the West Bank. Some have raised the possibility that the measures could spread to Israel's broader economy.

The Bank of Israel, however, opposes Netanyahu's proposal. In a statement, the central bank said cryptocurrencies cannot be used as a means of evading sanctions.

The opposition also criticized the idea ahead of the general election on October 27. Gadi Eisenkot, leader of the Yashar party, referred to Netanyahu's plan as "BibiCoin" in a post on X and called it "a threat to national security."

Experts also said cryptocurrencies would be difficult to use to replace the existing financial system. Israeli journalist Nadav Eyal said crypto could be used to move funds without passing through some traditional banking networks, but it could not replace bank credit or international capital markets.

Ben Samocha, founder of CryptoJungle, also said cryptocurrencies and blockchain are not tools for evading sanctions. He said blockchain transaction tracing can be used to track illicit fund flows, block routes for conversion into fiat currency or freeze assets, making it difficult for the Israeli economy to bypass international sanctions through crypto.