Netanyahu faces backlash over plan to use crypto to bypass sanctions

Israeli Prime Minister Benjamin Netanyahu is facing sharp criticism from central bankers, leading economists, and political opponents after proposing that Israel could use cryptocurrency to bypass potential international sanctions.

In an interview with Channel 10, Netanyahu stated he was preparing for a scenario in which foreign governments might impose sanctions on Israeli banks. Asked if he meant using cryptocurrency, he confirmed the strategy and added that blockchain technology was another option under review by his advisers to establish a bypass economy.

The Bank of Israel rejected the proposal, issuing a statement confirming that cryptocurrencies cannot be used as a route for bypassing sanctions. The central bank urged the government to focus on maintaining relations with primary trading partners rather than pursuing measures that could damage the economy. Netanyahu later told Channel 14 that he would take the central bank's advice into account but would ultimately follow his own judgment.

Economic and political pushback

The controversy comes amid growing diplomatic pressure over Israeli settlement policy in the West Bank, where Western nations including Britain, France, and Canada have introduced measures targeting settlement goods. More than 100 economists, including former central bank governor Jacob Frenkel and several Nobel laureates, signed a letter warning that the plan could trigger higher unemployment, falling foreign investment, and lasting damage to Israel's economic standing.

Political rivals also attacked the proposal ahead of Tuesday's election. Opposition leader Yair Lapid accused Netanyahu of making alarming promises, while key challenger Gadi Eisenkot branded the plan madness and dubbed it the BibiCoin policy.

Iranian threat warnings

Alongside the economic debate, Netanyahu has focused heavily on security issues in the final stretch of the campaign. In a video statement released by his office, he warned that Iran and its regional allies might try to disrupt Tuesday's general election through hostile attacks.

Netanyahu cited intelligence indicators of potential threats and warned Iran against testing Israel's readiness, stating that the military was prepared for both defensive and offensive operations.