By Ira – JBizNews Desk

The Bank of Israel delivered an extraordinary public rebuke to Prime Minister Benjamin Netanyahu on Saturday night, flatly rejecting his suggestion that cryptocurrency could carry Israel’s economy through potential international banking sanctions, and declaring that preventing sanctions, not working around them, is the job of the country’s political leadership.

“Cryptocurrencies cannot serve as a means to circumvent sanctions,” the central bank said in a statement. “The right course for the Israeli economy is to maintain economic relations with our primary trading partners and to focus on preventing sanctions and their negative impact on the economy. This is the responsibility of the political leadership, and it should act upon it.”

The statement answered comments Netanyahu made Friday on the Channel 10 economic network, where he warned that “there could be banking sanctions” imposed on Israel by the international community and said blockchain technology was “one of” the alternatives being readied, adding that he had already asked his advisers to prepare a plan. His remarks landed days after Britain and 11 other Western countries announced sanctions targeting goods from Israeli settlements in the West Bank, a response to a wave of settler attacks on Palestinians and a massive settlement construction approval. Those measures aim at the settlements, but economists and industry figures have warned the effects could seep into Israel proper.

Pressed Saturday night on Channel 14, Netanyahu did not retreat. “We have other means; crypto is one of them, it is not the sole method, and it is not certain that it will actually be used,” he said. “I hear the objections and I take them into account. And, by the way, I have consistently received advice from all kinds of sources, including the Bank of Israel. I thank the Bank of Israel for their advice, but I do what I think is right, and my long-term track record shows that I have led the State of Israel to unprecedented economic prosperity.”

With Israelis voting Tuesday, opposition leaders seized on the plan. Yashar leader Gadi Eisenkot, the election frontrunner, called “the BibiCoin vision” a threat to national security and accused Netanyahu of “dismantling the Israeli economy for generations ahead,” asking how an Israeli tech firm would get paid by overseas customers in a crypto economy. B’Yachad leader Naftali Bennett said he was “horrified” by what he called a “defeatist and gloomy vision” of a withdrawn, outcast Israel. Yisrael Beytenu chief Avigdor Liberman noted that blockchain transactions are traceable and that authorities already know how to block sanctioned wallets, adding that Netanyahu himself had blocked efforts to regulate and promote the crypto industry in Israel.

The practical concern behind the pushback is real. Crypto can blunt sanctions by opening alternative payment channels, but most blockchain networks leave a public trail, and Iran and Russia’s years of experimentation have shown digital assets can supplement, not replace, access to the banking system. Israel’s economy runs on its tech trade with the United States and Europe, the very partners whose sanctions Netanyahu’s plan is meant to outlast.

For investors, the clash itself is the signal: an open rift between the prime minister and his central bank, three days before an election, over how Israel would function under financial isolation. The shekel and Israel’s risk premium have both been sensitive to sanctions talk this fall, and traders will be listening Tuesday night for whether the next government treats the Bank of Israel’s warning as policy or as noise.

JBizNews Desk | Jerusalem

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