Prime Minister Benjamin Netanyahu proposed that Israel prepare a blockchain sanctions plan as a potential response to international economic restrictions on the country's banking system. Speaking on Channel 10 on Friday, Netanyahu said cryptocurrency and blockchain could serve as tools for an alternative economy if sanctions were imposed, and confirmed that advisers were already developing a plan. He provided no details about specific currencies, networks, or an implementation timeline.
The Bank of Israel formally rejected the proposal, stating that cryptocurrencies cannot serve as a route around international sanctions. The central bank urged political leaders to maintain economic ties with major trading partners and focus on preventing restrictions rather than preparing workarounds.
The proposal drew swift criticism from multiple quarters. Opposition figure Gadi Eisenkot called it the "BibiCoin vision" and warned it could worsen Israel's international isolation and deter investment. Over 100 economists and former Bank of Israel officials signed a letter opposing the plan, cautioning that sanctions could reduce foreign investment, increase unemployment, and weaken Israel's economic standing.
Critics raised practical concerns about the viability of cryptocurrency as a sanctions bypass. Blockchain transactions can be traced and authorities may identify or block wallets linked to sanctioned entities. Cryptocurrency cannot replace access to trade finance, bank credit, global capital markets, or foreign companies willing to transact. Businesses still require compliant banks, insurers, suppliers, and customers for cross-border operations.
Netanyahu's remarks came two days before Israel's October 27 election, amid warnings that foreign measures could affect the broader economy. The blockchain sanctions plan remained undefined, with no details provided on implementation or timing. Netanyahu said Saturday he would consider the Bank of Israel's criticism but would do what he thought best.
