Political storm after Netanyahu suggests cryptocurrency could help circumvent sanctions

Prime Minister Benjamin Netanyahu caused a political storm during remarks made in an interview with Israel’s Channel 10 on Friday, when he referred to the end of U.S. security as “only a matter of time,” and discussed the use of cryptocurrency to avoid economic sanctions.

During his interview with Roy Katz from economic news channel Calcalist, Netanyahu expressed concern that the economic sanctions already imposed by some Western nations, such as Britain and Holland, could eventually target Israel’s banking system.

Asked if he sees this as a real possibility, Netanyahu said, “Of course I’m concerned.”

He said Israel must prepare for the possibility of more sanctions.

“One must realize that sanctions – including banking sanctions – are a real possibility,” he continued. “We need to prepare an alternative economic framework. You know what that entails; you’re familiar with digital currencies – that’s something I’m working on. And there are other measures as well.”

The prime minister said one of the backup plans he ordered evaluated is using cryptocurrencies and blockchain.

Netanyahu also warned that Israel needs to prepare for the end of U.S. defense aid.

“If you expect that we will continue to receive what I secured on two previous occasions – tens of billions of dollars in American aid for the defense budget – you had better get used to the fact that it won't happen, because America has changed,” Netanyahu told Katz. “It’s over; it’s just a matter of time.”

הראשון לזהות?: "צריך להתארגן בכלכלה עוקפת לסנקציות בנקאיות, הבלוקצ'יין הוא חלופה, ביקשתי להכין תכניות לזה". נתניהו בראיון לערוץ 10 על ההיערכות לחרם כלכלי בינלאומי וסנקציות כלכליות על ישראל https://t.co/UJbZ8y7Sbh

— Roy Katz רועי כ"ץ (@roy_katz) October 23, 2026

Last week, a group over 60 economists, academics, and former senior public officials signed a warning letter issued by the "Economists’ Forum,” warning that international measures taken against illegal settlement activity are a warning sign for the Israeli economy.

The letter warned that extremist Jewish violence against Palestinians could exact a heavy economic toll on the country as a whole.

Following the interview, financial experts and opposition politicians criticized Netanyahu’s statements.

“Cryptocurrencies cannot serve as a means to circumvent sanctions,” the Bank of Israel said in an official statement Saturday evening.

The bank said that the Israeli government should focus on preventing sanctions.

“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,” the statement continued. “This is the responsibility of the political leadership, and it should act upon it.”

In a second letter, signed by over 100 leading Israeli economists, business executives and former senior public officials, released Saturday evening, experts warned that allowing banking sanctions could cause “enormous and irreversible damage” to Israel’s economy.

“Israel's banking system, companies, exporters and investors, foremost among them the high-tech sector, the economy's engine of growth, will be unable to function,” the letter warns.

The experts also warned that allowing such sanctions could lead to the loss of foreign workers, the inability to use credit cards or international shopping websites and negative impacts on Israel’s health system.

Netanyahu’s political opponents joined the critique, saying that the coalition government is causing problems for Israel internationally.

“This means the destruction of Israeli high-tech, the loss of the livelihood of hundreds of thousands of families, the poverty of millions of Israelis, a fatal blow to tourism and businesses, and a real danger to Israel's security,” said former Prime Minister and opposition challenger Naftali Bennett. “Netanyahu is putting Israel on a par with Iran, North Korea and Russia.”

Opposition head Yair Lapid gave a similar critique, saying, “Netanyahu's statement is crazy but true: If his government is elected, the security aid will stop and there will be severe economic sanctions on the State of Israel.”

Former IDF Chief of Staff, and opposition frontrunner Gadi Eisenkot, accused Netanyahu of “dismantling the Israeli economy.”

“The BibiCoin vision is a threat to national security,” Eisenkot posted to 𝕏. “After he finished dismantling Israeli society and weakening the IDF, Netanyahu has marked the next target: the dismantling of the Israeli economy for generations ahead.”

However, Prof. Avi Simhon, head of the National Economic Council and Netanyahu's economic adviser, told Calcalist, that Netanyahu is “really thinking about” the threat to Israel’s economy.

Two other officials close to Netanyahu’s office told Calcalist that the threat of sanctions may be overblown. The noted that many European and Latin American countries are moving toward the political right, and are not interested in sanctions against Israel.

They also praised Netanyahu’s moves towards greater self-sufficiency.

“The strategy of most countries in the world today is to take care of independence, including arms independence and supply chain independence,” one of the officials said.

Speaking to right-wing Channel 14 News on Saturday evening, Netanyahu said said he is aware of the criticisms regarding his statements, noting that he has received advice from sources, including the Bank of Israel.

“I hear the objections, I take it into account,” he said of the statements by various economic experts. “I received advice from all sorts of sources, including the Bank of Israel.”

However, he noted that the final decision rests with the prime minister.

“I thank them for their advice, I listen, but I am doing what I think best to continue the tremendous economic prosperity of the State of Israel,” he told Channel 14.

Netanyahu also told the outlet that attempts to penalize Israel have not deterred its economic growth.

“Our economy is very strong and groundbreaking,” he said.