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Finance & Markets · Middle East

Bank of Israel rebukes Netanyahu over crypto sanctions plan

The Bank of Israel rebuked Prime Minister Benjamin Netanyahu after he proposed using cryptocurrency and blockchain technology to help Israel bypass potential international sanctions. Netanyahu said he was preparing for a scenario in which foreign governments might sanction Israeli banks, while more than 100 economists warned that his proposal could harm the economy.

AI-assisted synthesis · Based on 5 outlets' reporting · Article text read from 1 of 5 outletsHow it's made

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5 outlets4 regionsLatest reporting 3 min read
Coverage: Mostly CenterL 0 · C 3 · R 1 · 1 unrated
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Photo: Avi Ohayon / Wikimedia Commons (CC BY-SA 3.0)

What happened

Key facts

  • Netanyahu proposed using cryptocurrency to help Israel bypass potential international sanctions (per The Times of India, newscord.org).
  • Netanyahu said he was preparing for a possibility that foreign governments could impose sanctions on Israeli banks (per The Times of India).
  • Netanyahu said cryptocurrency could help create a bypass economy and confirmed he meant cryptocurrency when asked directly (per The Times of India).
  • More than 100 economists, including former Bank of Israel officials, Jacob Frenkel and several Nobel laureates, signed a letter warning that the proposal could increase unemployment, reduce foreign investment and further harm Israel's international economic standing (per The Times of India).
  • Gadi Eisenkot called Netanyahu's crypto plan an effort to create alternative funding and said, “Bibicoin will destroy Israel.” (per The Jerusalem Post, The Times of India).

The brief

The Bank of Israel issued a rare rebuke of Prime Minister Benjamin Netanyahu after he suggested cryptocurrency and blockchain technology could help Israel get around potential international sanctions, according to The Times of India.

Netanyahu said he was preparing for the possibility that foreign governments could sanction Israeli banks and that Israel would need an alternative economic channel. In an interview with Israel's Channel 10 economic network on Friday, Netanyahu described the prospect of sanctions on banks and said a “bypass economy” would be needed.

When asked directly, he confirmed he was referring to cryptocurrency. The proposal also invokes blockchain technology, but the account does not detail how either technology would be used or what specific measures Netanyahu intends to take. More than 100 economists signed a letter on Sunday warning against the proposal.

The signatories included former Bank of Israel officials, former central bank governor Jacob Frenkel and several Nobel laureates. They warned that the plan could lead to higher unemployment, lower foreign investment and additional damage to Israel's standing in the international economy. These are predictions made in the letter, rather than reported outcomes.

Political opponents also criticized Netanyahu's proposal ahead of Tuesday's election.

Headline accounts identify Gadi Eisenkot as one critic: The Jerusalem Post quotes him calling the plan “Bibicoin” and warning it would “destroy Israel,” while The Times of Israel reports that he called it a “Threat to national security.” The headlines characterize his criticism as directed at Netanyahu's crypto plan for alternative funding and at preparing Israel's economy to bypass sanctions; they provide no further detail about his argument.

The central issue described in these accounts is a proposed way to manage the risk of foreign sanctions on Israeli banks. Netanyahu presented cryptocurrency as the mechanism for a possible bypass economy; the economists' letter warned of potential costs to employment, investment and Israel's economic standing.

The reporting does not identify any sanctions already imposed on Israeli banks, nor does it say that Netanyahu has implemented the proposal. The Times of India also reports that the Bank of Israel rebuked Netanyahu, but does not give the bank's specific objections or quote its statement.

The economists' warning and the political criticism are separate reactions described in the reporting; neither is evidence that the forecast economic harms have occurred. The proposal's practical details and the Bank of Israel's full reasoning are not specified in the account.

Why it matters

  • The economists' letter identifies Israeli workers as potentially bearing costs through higher unemployment if the proposal's forecast materializes.
  • The same signatories warn that lower foreign investment could affect Israel's economy; they also predict further damage to its international economic standing.
  • Netanyahu's stated concern is potential foreign sanctions on Israeli banks, and he identified cryptocurrency as a possible means of creating an alternative economic channel.

What to watch next

  • Whether Netanyahu sets out specific cryptocurrency or blockchain measures for the proposed bypass economy.
  • Whether the Bank of Israel provides the reasoning behind its reported rebuke.
  • Whether Netanyahu's political opponents, including Gadi Eisenkot, continue to criticize the proposal ahead of Tuesday's election.

How it's being covered

Coverage analysisShow details
5 source articles · 5 unique outlets
Outlet political mix: Mostly Center· 3 Center · 1 Right · 1 unrated
Where the outlets are based: Middle East 40% · US/Canada 20% · Other 40%
Outlet political mix
Mostly Center
Left
Center
Right
0 outlets
3 outlets
1 outlet
The marker shows coverage balance: each unique outlet counts once. 1 unrated outlet is not included.
Geography
Where the outlets covering this story are based.
5 unique outletsDominant coverage: Middle East
Coverage imbalance
  • Coverage is currently concentrated among Center-rated outlets (3 of 4 rated sources); comparatively few Left-rated outlets have published on the event.
How we measure coverage

How outlets' accounts compare

Updat3 does not yet have enough full reports to compare how outlets framed this story.

Timeline

Developments from this story's sources, dated background we compiled and fact-checked, and our earlier coverage. Each row says which.
  1. Benjamin Netanyahu first became Israel’s prime minister.
    Background · compiled and fact-checked by Updat3
  2. The country joined the Organisation for Economic Co-operation and Development in 2010, and Israeli banks have depended on correspondent relationships with foreign banks to facilitate cross-border payments.
    Background · from our historical context
  3. In 2014, the Bank of Israel warned the public about the risks of virtual currencies such as Bitcoin, citing volatility and the possibility of fraud.
    Background · from our historical context
  4. Israel enacted the Supervision of Financial Services (Regulated Financial Services) Law.
    Background · compiled and fact-checked by Updat3
  5. Israel became a FATF member in 2018.
    Background · from our historical context
  6. Israel joined the Financial Action Task Force.
    Background · compiled and fact-checked by Updat3
  7. In 2024, the United States and European Union imposed sanctions on some Israeli settlers and organizations over violence in the occupied West Bank; those measures did not target Israel’s banking system.
    Background · from our historical context

How we got here

In 2024, the United States and European Union imposed sanctions on some Israeli settlers and organizations over violence in the occupied West Bank; those measures did not target Israel’s banking system.

That distinction matters because Israel’s financial institutions operate through international banking and payment networks, while the country’s crypto rules developed around controlling risks to that system rather than creating a separate one.

Original sources

1 of 5 articles · US/Canada · Show all

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