In the wake of Prime Minister Benjamin Netanyahu’s comments on Friday about the possibility of using cryptocurrency to bypass economic sanctions, one thing is clear: someone is engaging in fearmongering just a few days before the election.
The question is: Who is trying to frighten whom?
Is it Netanyahu trying to frighten the public? At least that was the instant interpretation of some pundits after he discussed the matter on Friday in an interview with economic journalist Roy Katz on the Channel 10 economic program.
But the full context matters.
Katz asked whether Netanyahu was worried about the day after US President Donald Trump. Netanyahu answered, “Tell me, you’re not worried?”
After saying that the billions of dollars in US military aid would soon come to an end because the US had changed, Netanyahu added that Israel needed to understand that sanctions, including banking sanctions, were possible.
“So you need to organize a bypass economy,” Netanyahu said. “You know, there are currencies that can bypass (sanctions). We are also working on that.”
In looking at those comments, it is important to distinguish between what Netanyahu said and what was subsequently attributed to him.
He did not present a crypto economy as his preferred option. He presented it as a contingency plan in the drawer for that rainy day.
Preparing for such contingencies is part of a government’s job. It does not mean that Jerusalem has thrown up its hands, resigned itself to widespread sanctions, and begun planning to disconnect Israel from the global economy.
It means that if the country faces not a rainy day but a deluge of sanctions, the government wants something in the drawer to try to bypass them.
Whether that something would work is a legitimate question. But it is a different question from whether Netanyahu wants to lead Israel into economic isolation.
'Bibicoin' a threat to national security
Because Netanyahu’s campaigns have long warned of the diplomatic and military dangers awaiting the country if voters fail to support Likud, many in the media immediately saw this as the familiar pattern: he was scaring the public again.
But it was not exactly clear how telling voters that Israel could face economic isolation after years under Netanyahu’s leadership was supposed to draw them to his side. What was clear, however, was the frightening picture his opponents painted in response.
Yashar party head Gadi Eisenkot called the “Bibicoin vision” a threat to national security – inflating a remark about a contingency plan into a full-blown vision.
“After he finished dismantling Israeli society and weakening the IDF, Netanyahu has marked the next target: the dismantling of the Israeli economy for generations to come.”
Marked the next target? Netanyahu spoke about preparing for possible sanctions. Eisenkot turned that into an intention to dismantle the economy.
And then came the warning that if Netanyahu’s “vision” were implemented, “Israelis will lose their pensions and all their investments, and many of them will leave the country.”
Talk about trying to scare the voters.
Naftali Bennett, too, got into the act, not to be outdone by his rival in the change bloc.
“In [Netanyahu’s] view, Israel will become a withdrawn and outcast country in the world, disconnected from the economy, academia, and the global technology, so that we will be forced to move to a crypto and isolated economy,” he said.
The problem is that this is not what Netanyahu said. He did not say this was the future he wanted, or even that it would happen. He said Israel needed to prepare in case sanctions were imposed.
Those statements are quite different. The opposition’s responses simply erased what was originally said.
Bank of Israel says cryptocurrencies cannot circumvent sanctions
The Bank of Israel also weighed in, giving the controversy the added authority of the country’s central bank. It said cryptocurrencies could not be used to circumvent sanctions.
That is a substantive objection. If the proposed contingency plan cannot work, the public should know.
But the bank did not stop there.
“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,” its statement said. “This is the responsibility of the political leadership, and it should act upon it.”
Of course that is the right course. But who said otherwise?
By setting out that course as a corrective to Netanyahu’s remarks, the bank lent weight to the impression that he had proposed abandoning it: that instead of maintaining Israel’s economic ties and preventing sanctions, the prime minister was preparing to retreat into a crypto economy.
Yet saying that the government is working on a contingency plan does not mean it has raised the white flag on sanctions. Nor does it mean that Israel will stop working diplomatically to prevent them.
Then came a group of 109 senior economists, the Economists’ Forum for Democracy, which emerged from the 2023 protests against the judicial reforms, with a warning that banking sanctions would bring something approaching economic apocalypse.
This, they said, would pertain to soaring unemployment, the disappearance of foreign investment, a collapse in Israel’s global economic standing, unusable credit cards, no access to online retailers such as Amazon, and a mass departure of foreign workers unable to send money home.
And Netanyahu was the one accused of frightening the public.
The consequences of sweeping banking sanctions would plainly be serious. But discussing a fallback plan does not mean Netanyahu is announcing that sanctions are coming, much less choosing to bring them about, and presenting his remarks that way is itself peddling fear.
None of this requires accepting that Netanyahu is above doing the same to win votes. Those looking for examples need not look far.
On Sunday, he shared an AI-generated image on X/Twitter depicting a nuclear explosion over Tel Aviv, alongside a post by right-wing commentator Yuval Bloomberg warning that failing to elect a leader capable of confronting Iran could risk a “second Holocaust.”
A nuclear explosion over Tel Aviv. A second Holocaust. Days before an election.
That is fearmongering, and it deserves to be called out.
But so does taking a contingency plan, calling it a vision, and warning voters that it will cost them their pensions, their investments, and their access to AliExpress.
The opposition has enough real examples of Netanyahu’s fearmongering without manufacturing another, and then engaging in its own version of spreading fear.