Netanyahu floats blockchain sanctions workaround, drawing central bank rebuke

Israeli Prime Minister Benjamin Netanyahu has suggested that blockchain technology and cryptocurrency could help Israel prepare for potential international financial sanctions, drawing criticism from the country’s central bank and political opponents. The remarks, made ahead of elections, put the government’s approach to economic isolation at the center of a political dispute.

In an interview with Israel’s Channel 10 economic network, Netanyahu said the country needed to prepare for the possibility of restrictions affecting its banks. Asked whether blockchain could provide an alternative, he said it was among the options and that he had requested a plan, according to reporting by The Block and Israeli news outlets.

The proposal remained broadly framed rather than an announcement of an operational financial system. The Block reported that Netanyahu did not identify who would prepare the plan, which blockchain networks or currencies it might involve, or when it could be implemented. Those omissions leave the scope and practical objectives of the initiative unclear.

The Bank of Israel subsequently rejected the suggestion that cryptocurrencies could provide a route around sanctions. In a statement reported by Israeli media, the central bank said the country should preserve relationships with its principal trading partners and concentrate on preventing sanctions and their economic consequences. It placed responsibility for that effort with the political leadership.

Netanyahu later acknowledged the bank’s objections without withdrawing the idea. According to Globes, he described cryptocurrency as one of several possible tools, rather than the sole response, and said it was not certain that it would be used. His response kept the proposal under consideration while stopping short of committing to implementation.

The disagreement reflects competing approaches to the risk of financial isolation. Netanyahu presented alternative payment arrangements as contingency planning for restrictions that could affect conventional banking. The central bank’s response instead emphasized maintaining international economic ties, making prevention—not a technological workaround—the priority of its publicly stated position.

Political opponents also criticized the remarks, according to Cointelegraph and Israeli reporting, turning the proposal into an election issue. The debate extends beyond whether digital assets can move funds: it concerns whether discussing preparations for sanctions reassures businesses about national resilience or intensifies anxiety about the country’s economic direction.

Questions also remain about how far work on the proposal has progressed. Ynet reported that officials in economic ministries were unaware of such an initiative and that senior figures in the Prime Minister’s Office knew of no team preparing it. That reporting leaves a gap between Netanyahu’s statement that he requested a plan and publicly established evidence of its development.

The next substantive step would be clarification of the proposal’s mandate, participants and intended operation. Until those details emerge, the public record describes an option Netanyahu has asked to explore, not a demonstrated replacement for banking relationships. The central bank’s objection remains a significant institutional challenge to his suggested approach.