Cryptoupdated 40m ago2 min read
Benjamin Netanyahu Orders Blockchain And Cryptocurrency Plan To Bypass Banking Sanctions
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Netanyahu ordered officials to develop a blockchain-based plan to bypass potential banking sanctions. He said American military aid has ended and Israel must prepare for sanctions.
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Netanyahu floats crypto plan
Israeli Prime Minister Benjamin Netanyahu said Israel should prepare for possible banking sanctions and ordered a plan to bypass them using blockchain and cryptocurrencies, framing the effort as part of a broader response to sanctions risk. Netanyahu told Channel 10, "You need to organize in a bypass economy," and he added, "And you know what digital currencies are, and I’m working on that too." Netanyahu also said American military aid to Israel is "only a matter of time" to end, and he linked the sanctions discussion to a need to reduce dependence on external support.
The Bank of Israel rejected the idea that digital currencies could serve as an alternative route around sanctions, warning that "cryptocurrencies cannot serve as a means of circumventing sanctions." The Bank of Israel urged the political leadership to focus on preventing sanctions and preserving Israel’s economic ties with its trading partners, saying the issue "falls within the responsibility of the political leadership."
Critics challenge the workaround
Former supervisor of banks at the Bank of Israel, Yair Avidan, said Netanyahu’s proposal reflected a misunderstanding of how sanctions work, warning, "Blockchain is not a solution for circumventing sanctions." Avidan argued that "Moving a transaction onto a blockchain network" does not make sanctions disappear, does not create an alternative economy, and does not override legal prohibitions. Former Finance Ministry director-general Yarom Ariav described the remarks as a serious warning sign, saying, "Sanctions are not an inevitable force of nature."
Yarom Ariav warned that proposing financial workarounds placed Israel alongside internationally isolated regimes, and he recalled economic isolation of South Africa during apartheid. Yair Avidan acknowledged that blockchain could help maintain payment systems during emergencies or infrastructure disruptions, but he stressed that such applications should not be confused with evading sanctions.
What happens next
The Bank of Israel said the proper course for Israel’s economy is to maintain economic relationships with its main trading partners and focus on preventing sanctions and their negative impact. The Bank of Israel said the government should take action to advance that goal, adding that the issue "should take action to advance that goal." Yair Avidan warned that the threat of sanctions is real and could damage banking relationships, trade, credit and investment, potentially raising the cost of living.
Yair Avidan argued that preparing for that possibility requires responsible policymaking, maintaining international trust and protecting commercial ties. The debate leaves Israel’s crypto and blockchain discussion centered on whether any plan can be implemented in a way that preserves access to international financial systems rather than replacing them, while Netanyahu’s proposal remains tied to the idea of preparing a bypass economy.