On October 24, 2026, the Bank of Israel publicly rejected Prime Minister Benjamin Netanyahu’s idea of using cryptocurrencies and blockchain to circumvent potential international banking sanctions. Later that day, the prime minister responded to the regulator’s criticism but did not abandon the idea.
What the Bank of Israel Said
The central bank issued a brief statement setting out an unequivocal position: “Cryptocurrencies cannot be used to circumvent sanctions.” The regulator believes that the right course for the country’s economy is to maintain relations with its main trading partners and prevent sanctions themselves, along with their negative impact. According to the bank’s representatives, this issue falls within the responsibility of the political leadership, which must take action to advance it.
How It All Began
It began with an interview Netanyahu gave to the business channel Channel 10, which aired on October 23, 2026. The prime minister said the country needed an alternative economic system in case of banking sanctions: “We need to understand that banking sanctions are possible. We need to prepare an alternative economic system to get around them… I’m already working on it.”
When a journalist asked about blockchain, Netanyahu gave a brief reply: “One of them, of course. And I’ve already asked for a plan to be prepared for this.” Thus, blockchain is being considered as one element of a backup system, not as the only solution.
The Prime Minister’s Response
In an interview with Channel 14, Netanyahu commented on the central bank’s position. He said he had heard its objections and taken them into account, thanked the regulator for its advice, but added that he would do what he considered right. He also clarified his wording: “Cryptocurrency is one of the tools, not the only one, and it is not certain that it will be used.”
The dispute between the government and the central bank is not only about cryptocurrency. It concerns preparing the economy for a scenario in which banking restrictions could be imposed on Israel. The Bank of Israel is relying on diplomacy and maintaining ties with trading partners, while the prime minister allows for parallel work on backup mechanisms.