Netanyahu Floats Crypto to 'Evade Banking Sanctions,' Bank of Israel Rebukes Plan as Economy Faces Isolation Threat

Benjamin Netanyahu told Israeli viewers he is already working on a way around international banking sanctions, and confirmed on air that he meant cryptocurrency.

The Israeli prime minister made the remarks in an interview with Channel 10's economic broadcaster, aired Friday, days ahead of Israel's October 27 parliamentary election.

"We need to prepare ways to evade banking sanctions through an alternative economic system," Netanyahu said. "You know what that means - the currencies that can bypass them. I'm working on that, too."

Asked directly whether he meant cryptocurrency, Netanyahu replied, "Very correct."

The statement came as the United Kingdom and eleven other countries imposed sanctions in September targeting trade in goods from Israeli settlements in the occupied West Bank, with France, Canada and Spain weighing similar measures.

Central bank pushes back

Israel's central bank issued a public rebuke the following day. "Cryptocurrencies cannot serve as a means of circumventing sanctions on Israel," the Bank of Israel said in a statement Saturday, adding that the right course for the economy is to "preserve economic relations with our main trading partners" rather than seek workarounds.

The bank said responsibility for preventing sanctions rests with Israel's political leadership and urged the government to act to protect the country's economic ties.

Netanyahu responded in a separate Saturday interview, saying cryptocurrency was one option among several and that he would weigh the bank's objections. "I hear the objections and I take them into account," he said. "I thank the Bank of Israel for their advice. I listen, but I do what I think is right."

More than 100 Israeli economists, business leaders and former senior officials, including two Nobel laureates, signed a letter warning that broad international banking sanctions would cause "tremendous and irreversible damages" to Israel's banking sector, exporters, investors and high-tech industry, according to Middle East Eye.

Opposition says isolation, not prevention

Opposition leader Yair Lapid said on X that Netanyahu's proposal "belongs to countries like Iran, Russia, and Venezuela - nations whose banks are cut off from the world, whose companies cannot accept payments, and whose young people are fleeing."

Former finance minister Avigdor Liberman said Netanyahu was admitting Israel faces "a real danger of diplomatic isolation and economic sanctions," yet responding by building a sanctions-evasion economy instead of preventing the isolation itself.

Aid warning

In the same Channel 10 appearance, Netanyahu told Israelis to prepare for an eventual end to U.S. military assistance. "If you think we will continue receiving what I secured twice - tens of billions of dollars in American aid for the defence budget - you'd better prepare yourselves," he said, adding that "America has changed, not because Israel has changed. It will end."

Under the current Memorandum of Understanding, Washington provides Israel $3.3 billion annually in foreign military financing plus $500 million for joint missile defense programs, a total of $3.8 billion a year contingent on congressional approval. Biden signed a supplemental funding bill in April 2024 adding further military and missile-defense support.