Israel's Central Bank Rebukes Netanyahu Plan to Use Crypto to Dodge Sanctions

The Bank of Israel stated on Saturday that cryptocurrencies "cannot serve as a means to circumvent sanctions imposed on Israel."

This followed Prime Minister Benjamin Netanyahu's announcement that he was developing a blockchain-based plan to bypass potential international sanctions.

The Bank of Israel further added that "The right course of action for the Israeli economy is to preserve economic relations with our primary trading partners and to focus on preventing sanctions and their negative impact on the economy."

Netanyahu mentioned in a Channel 10 interview on Friday that Israel needed to prepare for possible banking sanctions, stating he had requested a plan utilizing crypto and blockchain networks to circumvent them, adding, "Blockchain is one of the alternatives, certainly."

More than 100 economists, including former Bank of Israel governor Jacob Frenkel and several Nobel laureates, issued a letter on Sunday. They warned that the proposed plan would result in a collapse in foreign investment and higher unemployment.

These economists described the idea as "a puzzling solution, one accepted in criminal organizations, that will not help in the slightest."

Gadi Eisenkot, Netanyahu's main challenger in Tuesday's election, dismissed the concept, calling the "BibiCoin policy" "madness" and suggesting it would push companies overseas.

Furthermore, Gali Ingber, head of finance studies at the College of Management Academic Studies, told The Times of Israel that sanctions cannot be circumvented with digital currencies because "the blockchain system is publicly open and transparent, which means that every transfer is registered and can be traced to its origin."