Benjamin Netanyahu has asked for a blockchain plan to prepare Israel for possible banking sanctions, suggesting cryptocurrencies could help the country keep moving money if access to the international financial system becomes harder. The proposal has drawn sharp criticism from former Israeli financial officials.
Netanyahu discussed crypto and blockchain broadly. He did not name Bitcoin, choose a particular currency or announce a government token purchase.
Netanyahu asks for an alternative to banking sanctions
The prime minister made the comments in an October 23 Channel 10 interview with Roy Katz, who shared the original clip. In The Block's English translation, Netanyahu said:
"We need to understand that there could be sanctions, including banking sanctions. You need to prepare an economy that can bypass them."
He said he was working on currencies that could get around such restrictions and on other measures. When Katz asked whether blockchain could offer an alternative, Netanyahu said it was one option and that he had already requested a plan.
Netanyahu also warned that American military assistance would eventually end, arguing that Israel needed to make more of its own weapons and ammunition. Those were his predictions about future support, rather than an announced U.S. decision to terminate it.
As Apex previously reported, he has separately argued that Israel needs to prepare for a potentially hostile White House after Donald Trump leaves office. The financial proposal comes days before Israel's October 27 election.
Former banking supervisor points to the missing counterparties
An October 24 report by Ynet brought criticism from Yair Avidan, the Bank of Israel's former supervisor of banks, and Yarom Ariav, a former director general of the Finance Ministry.
Avidan said a blockchain payment arrangement would still depend on willing banks, payment providers and trading partners, as well as liquidity and connections to other financial systems. The technology alone would not make those businesses willing to participate.
"When sanctions are imposed, it cannot be assumed that these parties will agree to participate in transactions intended to circumvent them."
Ynet also reported that officials in economic ministries and senior figures in the Prime Minister's Office had not heard of a team preparing the plan Netanyahu described.
Ariav warned that talk of financial workarounds could hurt confidence in Israel's economy and deter investors. He argued that sanctions should be addressed through government policy and international relationships, rather than treated as an unavoidable event that required an alternative financial system.
Crypto transactions still face sanctions rules
There is a legal obstacle alongside those commercial concerns. The U.S. Treasury's Office of Foreign Assets Control says in its guidance, first issued in March 2018, that sanctions obligations are the same whether a transaction uses digital currency or conventional money.
That applies to U.S. persons and others under OFAC's jurisdiction, including businesses processing digital-currency payments. They remain responsible for avoiding prohibited dealings with blocked people and property, and transactions designed to evade applicable sanctions are also prohibited.
Chainalysis said in its January 8 crypto crime report that the Russia-linked, ruble-backed A7A5 token had processed more than $93.3 billion in transactions in less than a year following its February 2025 launch. Its research described growing use of digital assets by sanctioned states.
The Times of Israel reported that Netanyahu's comments followed British-led measures targeting trade with Israeli settlements in the West Bank. Those settlement-focused restrictions are separate from the broader banking sanctions he said Israel should prepare for.
Avidan did identify another use for the technology: keeping payments working if infrastructure is damaged or disrupted during a crisis. In his assessment, blockchain could form part of a financial continuity plan, with the focus on maintaining services when normal payment infrastructure fails.