The remarks come amid growing diplomatic pressure on Israel over its settlement policy in the occupied West Bank
Israeli Prime Minister Benjamin Netanyahu has drawn a rare rebuke from the Bank of Israel after suggesting that cryptocurrency and blockchain technology could help the country circumvent potential international sanctions.In an interview with Israel's Channel 10 economic network on Friday, Netanyahu said he was preparing for a scenario in which foreign governments could impose sanctions on Israeli banks. “There could be sanctions, and sanctions on banks so you need to set up a bypass economy,” he said, confirming that he was referring to cryptocurrency when asked directly. He added that blockchain technology was another possibility and that he had asked his advisers to prepare a plan.The central bank rejected the proposal in a statement on Saturday, saying cryptocurrencies “cannot be used as a route for bypassing sanctions”. It urged the government to prioritise maintaining economic relations with Israel's principal trading partners and preventing measures that could damage the economy.Netanyahu acknowledged the criticism later that day, telling Channel 14 that he would take the bank's advice into account but would ultimately follow his own judgement.
The remarks come amid growing diplomatic pressure on Israel over its settlement policy in the occupied West Bank. Britain, France, Canada and other Western countries have announced measures targeting goods from Israeli settlements, citing concerns over settler violence and settlement expansion.On Sunday, more than 100 economists, including former Bank of Israel officials, ex-central bank governor Jacob Frenkel and several Nobel laureates, signed a letter warning that Netanyahu's proposal could trigger higher unemployment, falling foreign investment and further damage to Israel's international economic standing.The economists cited countries including South Africa, Iran and Russia as examples of the economic consequences of sanctions, warning that Israeli living standards could deteriorate and the state's ability to finance its security could be undermined.Netanyahu's political opponents also attacked the proposal ahead of Tuesday's election. His main rival, Gadi Eisenkot, described the plan as “madness”, warning that what he called the “BibiCoin policy” could drive companies abroad and weaken national security.
Opposition leader Yair Lapid accused Netanyahu of making alarming promises to voters about the country's economic future.The controversy comes as Netanyahu faces pressure over both security and the economy. Israel's military continued a major operation in the occupied West Bank on Sunday following a gun attack that killed two Israeli soldiers in Hebron on Friday. The operation has displaced thousands of Palestinians, according to local officials, and imposed sweeping restrictions on movement.