Netanyahu proposes cryptocurrency to bypass potential banking sanctions

Reports published on 25 October 2026 said that Benjamin Netanyahu, Israel’s prime minister, suggested considering cryptocurrency as a way for the country to bypass possible international banking sanctions. Middle East Eye said he raised the idea in a Channel 10 economic interview broadcast on Friday, ahead of Israel’s parliamentary election on 27 October.¹²

A proposed alternative

According to Middle East Eye, Netanyahu said Israel should prepare a different economic system to deal with potential restrictions on banking. He said he was working on currencies that could operate around those restrictions and, when asked whether he meant cryptocurrency, confirmed that he did.²

Cointelegraph also reported that Israel was examining cryptocurrencies and blockchain technology as possible ways to limit the economic pressure of financial sanctions. It quoted Netanyahu saying: “Blockchain is an alternative to sanctions.” The outlet described his presentation of blockchain as a strategic instrument for the country as a shift in the government’s approach to digital currency.¹

Central bank rejects the premise

Israel’s central bank disputed the idea that digital currencies could provide a replacement for the country’s external economic relationships. Middle East Eye quoted the institution saying that “digital currencies cannot replace economic relations with the country’s main trading partners.” Cointelegraph reported that the Bank of Israel also rejected cryptocurrency as a means of circumventing sanctions.¹²

The distinction between transferring funds and sustaining a financial system featured in criticism reported by Cointelegraph. Nadav Eyal, a columnist for Yediot Ahronot, argued that cryptocurrencies were no replacement for a country’s financial infrastructure. The outlet said digital currencies could transfer value without using some conventional banking channels, but could not supply banks with credit facilities or take the place of international capital markets.¹

Cointelegraph also reported that cryptocurrencies would not induce foreign businesses to disregard sanctions prohibiting dealings with Israel. Ben Samocha, founder of CryptoJungle, rejected the use of cryptocurrency and blockchain to get around sanctions. According to the outlet, he said blockchain investigations could trace illicit money, obstruct its conversion through conventional currency gateways and enable funds to be frozen.¹

Sanctions and political criticism

The proposal came as countries continued discussing sanctions against Israel, Middle East Eye reported. Cointelegraph said 12 Western nations had imposed restrictions on products originating in West Bank settlements established by Israel, in response to attacks by settlers on Palestinians and Netanyahu’s approval of further settlement construction. That outlet also reported the possibility of restrictions extending beyond the settlements into Israel itself.¹²

Political opponents challenged Netanyahu’s remarks, according to Cointelegraph. It quoted Yashar party leader Gadi Eisenkot saying: “The BibiCoin vision is a threat to national security.” The outlet also reported criticism of the blockchain proposal at a Saturday evening anti-government rally in Tel Aviv. Middle East Eye placed the interview days before the scheduled 27 October parliamentary vote.¹²