The Bank of Israel issued an unusual public rebuke of Prime Minister Binyamin Netanyahu on Motzaei Shabbos, rejecting his proposal to use cryptocurrency to bypass potential international financial sanctions against Israel.

The central bank warned that digital currencies cannot provide a reliable alternative to the international banking system, urging the government to concentrate on preventing sanctions rather than attempting to circumvent them.

The controversy began Friday when Netanyahu warned during an interview that Israel must prepare for the possibility of severe economic restrictions, including sanctions targeting Israeli banks.

The prime minister suggested that cryptocurrency and blockchain technology could offer alternative financial channels, revealing that he had already instructed his advisers to prepare a plan examining their potential use.

However, the Bank of Israel rejected the proposal, stating that cryptocurrencies cannot be used to bypass sanctions.

The bank emphasized that maintaining economic relationships with Israel’s principal trading partners is essential and that responsibility for preventing sanctions rests with the country’s political leadership.

Netanyahu responded to the criticism on Motzaei Shabbos, saying he would consider the central bank’s position but would ultimately make his own decisions.

“I hear the resistance; I am taking it into account,” Netanyahu said. “I thank the Bank of Israel for the advice. I listen, but I do what I think [is best].”

The dispute comes after Britain and 11 other Western countries announced sanctions targeting products originating from Israeli communities in Yehuda and Shomron.

Although the measures currently focus on those communities, economists have warned that broader financial restrictions could have serious consequences for Israel’s economy.

Meanwhile, opposition leaders sharply criticized Netanyahu’s remarks just three days before Tuesday’s Knesset elections.

Yashar chairman Gadi Eisenkot accused the prime minister of threatening Israel’s economic future, describing the proposal as a danger to national security.

“The BibiCoin vision is a threat to national security,” Eisenkot declared, accusing Netanyahu of pursuing policies that could disconnect Israel from international financial markets.

Eisenkot questioned how Israeli technology companies would continue receiving foreign investments and payments if international banking relationships were disrupted.

He warned that such a scenario could threaten pensions, investments, employment, and government funding for essential services.

Former Prime Minister Naftali Bennett also criticized the proposal, expressing concern that Netanyahu was preparing Israel for a future of growing international isolation.

Yisrael Beytenu chairman Avigdor Lieberman argued that cryptocurrency transactions are traceable and that international authorities can identify and restrict digital wallets associated with sanctioned entities.

Lieberman also accused Netanyahu of previously obstructing efforts to regulate Israel’s cryptocurrency industry.

The controversy follows Netanyahu’s additional warning that Israel should prepare for a future in which American military assistance is reduced, arguing that changes within the United States could eventually limit Washington’s willingness to continue providing billions of dollars in defense aid.

Netanyahu has maintained that Israel must become increasingly economically and militarily independent, while his political opponents argue that the government’s policies are contributing to the country’s growing diplomatic challenges.

(YWN’s Jerusalem desk is keeping you updated after tzeis ha’Shabbos in Israel)