JERUSALEM – Prime Minister Benjamin Netanyahu is facing criticism from economists and political rivals after suggesting Israel could use cryptocurrency to protect its economy from potential international sanctions, days before a closely contested election.
In an interview with Israel’s Channel 10 on Friday, Netanyahu said he was preparing for a scenario in which broader sanctions could be imposed on Israel. His remarks followed last month’s announcement by Britain, France and Canada that they would block imports from Israeli settlements in the West Bank, reflecting mounting diplomatic pressure over Israel’s settlement policy.
“There could be sanctions, and sanctions on banks so you need to set up a bypass economy,” Netanyahu said. “You know, there are currencies that can bypass (sanctions). We are also working on that.”
Asked whether he meant cryptocurrency, Netanyahu replied: “Very true, very true,” adding that blockchain technology was another possibility.
The Bank of Israel issued a rare rebuke, saying cryptocurrencies cannot be used to bypass sanctions and urging political leaders to pursue policies that would make such measures unnecessary. The central bank said Israel’s best course was to preserve economic ties with major trading partners and prevent sanctions rather than plan around them.
Netanyahu defended his record on Sunday, urging voters to support him and saying he and US President Donald Trump had two years left to work together to topple Iran’s rulers.
More than 100 economists, including former Bank of Israel officials, former central bank governor Jacob Frenkel and several Nobel laureates, signed a letter warning that the proposal could raise unemployment, reduce foreign investment and damage Israel’s global economic standing.
They compared the potential impact to sanctions faced by South Africa, Iran and Russia, saying Israeli living standards could fall sharply and the state’s ability to finance security could be severely weakened.
Netanyahu’s main election rival, Gadi Eisenkot, called the plan “madness” and warned that a “BibiCoin policy” could push companies abroad and undermine national security. Opposition leader Yair Lapid said Netanyahu had “gone off the rails” and accused him of promising Israelis a future of shortages similar to Russia and Iran.
Opinion polls indicate a possible stalemate in Tuesday’s election, with neither Netanyahu’s ruling coalition nor the opposition alliance expected to secure a parliamentary majority.