Prime Minister Benjamin Netanyahu says he has ordered officials to prepare a Netanyahu blockchain plan for an ‘alternative economic system’ as Israel braces for possible banking sanctions – a proposal the Bank of Israel rejected outright and that, as of this weekend, no one in his own economic ministries appears to have heard of.
The remarks came in a Friday interview with Channel 10’s Roi Katz, and landed four days before Israel’s Knesset election, hours after Britain and 11 other Western countries announced sanctions on goods from Israeli settlements in the West Bank.
What Netanyahu actually said
Asked about the risk of banking sanctions, Netanyahu was blunt: ‘You need to understand that there could be banking sanctions. You need to prepare an alternative economic system, and you know what that is, and you know which currencies can bypass this, and I’m working on that as well.’
Pushed on whether blockchain could help Israel weather economic sanctions, he replied: ‘One of them. Certainly. And I’ve already asked for a plan to be prepared for that.’
He also tied the economic framing to American support, warning that the flow of U.S. military aid will not continue in its historical form – ‘If you think we’ll continue receiving… it won’t happen, because America has changed’ – and dismissed the Bank of Israel governor’s caution: ‘I disagree with him. Unequivocally, I disagree with him.’
Why sanctions are suddenly a live question
The trigger was concrete: the UK-led settlement-goods package followed settler attacks and expanded settlement construction, and it marks the sharpest Western economic pressure on Israel in years. In a race that ends in days, positioning for a world where correspondent banking relationships tighten is now a campaign theme – and digital currencies, including dollar stablecoins, are part of that conversation whether the central bank likes it or not.
Bank of Israel: crypto cannot circumvent sanctions
The central bank did not mince words: ‘Cryptocurrencies cannot serve as a means to circumvent sanctions’, adding that ‘the right course for Israel’s economy is to maintain its economic relationships with our main trading partners and focus on preventing sanctions and their negative impact on the economy.’
Industry reaction split the same way it usually does. High-tech and economic leaders called the idea ‘highly dangerous’ and ‘absurd’, with comparisons to Iran and North Korea and warnings about damage to Israel’s high-tech sector and credit rating. The Crypto Companies Forum’s Nir Hirschman welcomed the technology angle but noted the obvious irony: public blockchains are transparent, so they are ‘not a haven for hiding money’ – every transaction is traceable.
Does the plan actually exist?
This is the part worth sitting with. Netanyahu says he ordered a plan prepared, but officials in Israel’s economic ministries and even senior figures in the Prime Minister’s Office told Israeli media they were unaware of any such initiative or team working on it. As of publication, the blockchain plan to bypass banking sanctions exists as an instruction, not a project.
Opposition figures summed up the political read: the proposal would turn the Jewish state into an economic pariah. Whether any of it survives contact with the next government – or with mathematics – is the story from here.
Honest note: this report is based on the Friday interview and subsequent Israeli and international coverage; no official plan document has been published.
