Israel's Central Bank Rebukes Netanyahu Plan to Use Crypto to Dodge Sanctions

In brief

• The Bank of Israel said crypto cannot be used to get around sanctions, after Prime Minister Benjamin Netanyahu said he was working on a blockchain-based plan.
• More than 100 economists, including former central bank governor Jacob Frenkel and several Nobel laureates, warned the plan would damage Israel's economy.
• Netanyahu's rivals seized on the comments ahead of Tuesday's election, with challenger Gadi Eisenkot dismissing it as a "BibiCoin policy."

Israel's central bank has rejected Prime Minister Benjamin Netanyahu's suggestion that cryptocurrency could help the country get around potential international sanctions, in a rare public rebuke days before Tuesday's national election.

Cryptocurrencies "cannot serve as a means to circumvent sanctions imposed on Israel," the Bank of Israel said in a statement on Saturday, according to the Financial Times. "The right course of action for the Israeli economy is to preserve economic relations with our primary trading partners and to focus on preventing sanctions and their negative impact on the economy," it added.

Netanyahu said in a Channel 10 interview on Friday that Israel needed to prepare for possible banking sanctions, and that he had asked for a plan to use crypto and blockchain networks to get around them. "Blockchain is one of the alternatives, certainly," he said. He did not say who was drafting the plan or which currency or network it would use.