Bank of Israel: Crypto Cannot Bypass Sanctions as Netanyahu Warns of Banking Restrictions
Key Facts
The Bank of Israel said cryptocurrencies "cannot be used as a route to circumvent sanctions," responding to Prime Minister Benjamin Netanyahu’s call to prepare a plan for the possibility of banking sanctions against the country. The bank urged preserving economic ties with key trading partners and focusing on preventing sanctions and their negative effects. The response puts the two institutions at odds publicly over a specific proposal: Netanyahu raised exploring blockchain as one option, while the bank said cryptocurrencies do not offer the route he proposed. Netanyahu did not announce that the plan had become government policy or that it had taken effect. The bank’s statements also did not say that comprehensive banking sanctions against Israel were in force.
Netanyahu said in a televised interview that Israel could face banking sanctions and should prepare an economy capable of overcoming them. Asked about blockchain, he described it as "another option" and said he had asked his advisers to prepare a plan for using it. Blockchain, as described by The Times of Israel, is a decentralized digital system that does not rely on central government authorities. But Netanyahu did not specify who would prepare the plan, which blockchain or currencies it might involve, or a possible timeline for implementation. The idea therefore remained at the level of a request to prepare a plan, with no implementation details announced.
The bank said that addressing the issue falls within the responsibilities of the political leadership, adding that "it would be appropriate for it to work to advance it." The position came alongside its warning against viewing cryptocurrencies as a way to circumvent sanctions and its call to preserve economic ties with key trading partners. The bank also focused on preventing sanctions and the negative effects they could cause, rather than offering an alternative route around them. The response shows the bank referring responsibility for action to politicians while registering its objection to the means Netanyahu proposed. This specific disagreement does not establish a broader divergence between the bank and the government over financial policy or international compliance.
Netanyahu’s remarks followed Britain and 11 other Western countries announcing sanctions targeting goods from Israeli settlements in the West Bank. The Times of Israel reported that economists and industry figures had warned the previous month that the repercussions could extend into Israel. The announced measures target settlement goods, while Netanyahu’s warning concerned possible banking sanctions; the two have different scopes. A senior Israeli economic official warned, according to Channel 12, that the idea "will certainly not achieve its goal" and that merely discussing it could harm the economy. The warning adds concern about the economic impact of the remarks themselves, before any specific plan was announced.
Yashar party leader Gadi Eisenkot criticized Netanyahu’s proposal, writing on X that the "Bibi Coin" concept was "a threat to national security." He said implementing the idea could isolate Israel from the global economy, linking the use of cryptocurrencies to risks for the country’s economic ties. In the same televised interview, Netanyahu said U.S. military aid would not continue forever and that its end was "a matter of time." The remarks came ahead of Israel’s election scheduled for 27 October 2026. Netanyahu did not set a date for preparing or implementing the plan, while the bank called on the political leadership to work on the issue.