Israeli Prime Minister Binyamin Netanyahu has revealed that he ordered the preparation of a contingency plan to protect Israel’s economy against possible international sanctions, including restrictions on its banking system, with digital currencies among the options under consideration. His remarks prompted an unusually sharp public response from the Bank of Israel, which warned that cryptocurrency cannot provide an effective means of circumventing economic sanctions.

In an interview with Israel’s Economy Channel, Netanyahu acknowledged that he is concerned about the possibility of foreign governments imposing financial restrictions on Israel and said the country must prepare alternative economic mechanisms to protect itself.

“Of course I’m concerned,” Netanyahu said. “You have to understand that there could be sanctions, including banking sanctions. You have to organize an alternative economic system. And you know what that is. You know what digital currencies are, and I’m working on that as well. And there are other things, too.”

Asked whether blockchain technology, which allows financial transactions to be recorded and managed through decentralized digital networks without relying on a central intermediary, could provide an alternative to the traditional banking system, Netanyahu confirmed that the government was examining that possibility.

“Yes, that is one of the ways,” he said. “And I have already requested that a plan be prepared for it.”

The prime minister’s comments indicated that his government is considering how Israel could maintain financial activity if international sanctions were to interfere with access to conventional banking services.

Netanyahu also issued a warning about the future of American military assistance to Israel, saying the country must prepare for the possibility that the substantial financial support it has received from Washington will eventually come to an end.

“If you think we will continue receiving what I secured twice, which amounts to tens of billions of dollars in American assistance for the defense budget, get used to the fact that it won’t continue, because America has changed,” Netanyahu declared. “It’s over. It’s only a question of time.”

His remarks suggested that Israel should not assume that the current level of American security assistance will remain available indefinitely, particularly as political attitudes and priorities in the United States continue to evolve.

The comments drew an immediate response from the Bank of Israel, which issued an unusually forceful statement challenging the economic feasibility of Netanyahu’s proposed approach.

“Cryptocurrencies cannot serve as a route for circumventing sanctions,” the central bank declared.

The bank argued that Israel’s economic interests would be better served by maintaining strong relationships with its principal trading partners and working to prevent sanctions rather than developing mechanisms intended to bypass them.

“The correct course for Israel’s economy is to preserve economic relations with our main trading partners and focus on preventing sanctions and their negative effects on the economy,” the bank stated. “This matter falls within the responsibility of the political leadership, and it would be appropriate to act to advance that objective.”

The statement amounted to a public disagreement between Israel’s central bank and the prime minister over how the country should prepare for the possibility of international financial restrictions.

Responding to the criticism, Netanyahu emphasized that cryptocurrency was merely one option under examination and that no decision had been made to adopt it.

“Cryptocurrency is one of the tools, not the only tool, and it is not certain that it will be used,” Netanyahu said. “I hear the objections and take them into account.”

The prime minister also defended his economic record, suggesting that his previous policies demonstrated his ability to guide Israel through difficult financial circumstances.

“I have received advice from various sources, including the Bank of Israel, and I think that, looking at my record over time, I have led the State of Israel to unprecedented economic prosperity,” Netanyahu said.

“I introduced a free-market economy here, broke up monopolies, reduced waste in the public sector, and we lowered taxes and prices as never before.”

{Matzav.com}