Bank of Israel rejects Netanyahu’s crypto sanctions bypass plan

The Bank of Israel on Saturday rejected Prime Minister Benjamin Netanyahu’s proposal to use cryptocurrencies as a mechanism for circumventing potential economic sanctions. The central bank stated that digital assets cannot serve as an alternative to traditional financial relationships, emphasizing that preserving economic ties with major trade partners remains the only viable strategy for Israel’s economy.

In a statement carried by the public broadcaster, the Bank of Israel warned that cryptocurrencies cannot be used as a route for bypassing sanctions. The institution stressed that preventing sanctions and limiting their negative impact falls within the political leadership’s responsibilities, urging the government to focus on maintaining international trade ties rather than seeking technological shortcuts.

Opposition leader Yair Lapid criticized Netanyahu’s remarks, calling the prime minister’s statement “insane” ahead of Tuesday’s Knesset elections. Lapid claimed that if Netanyahu’s government is elected, security assistance will stop and severe economic sanctions will be imposed on Israel.

Former Prime Minister’s Office chief Yoav Horowitz, now a co-founder of the opposition Yashar party, warned that Netanyahu’s comments alone could trigger immediate financial consequences. Horowitz told the public broadcaster that reactions to Netanyahu’s remarks would become apparent Sunday and Monday, predicting that “we will see entities withdrawing their money from here.”

He accused Netanyahu of preparing for failure rather than prevention, stating that “instead of telling us how he will prevent sanctions and ensure they are not imposed, he explains what should be done when sanctions are imposed.” Horowitz added that “Netanyahu, Ben-Gvir and Smotrich equal sanctions,” referring to National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich.

Netanyahu had also cautioned during his television appearance that US aid to Israel could cease and Washington’s position on sanctions might shift. His remarks came amid growing concerns over Israel’s economic stability and its ability to navigate potential international pressures.

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