Netanyahu Wants Crypto to Beat Sanctions, and Israel’s Central Bank Says No

TLDR

• Prime Minister Benjamin Netanyahu said Israel should prepare for possible banking sanctions, with crypto and blockchain as one option.
• The Bank of Israel said cryptocurrencies “cannot be used as a route for bypassing sanctions.”
• Opposition leaders Gadi Eisenkot, Naftali Bennett and Avigdor Liberman criticized the idea three days before elections.
• Bank and market figures told Israel Hayom they fear a sell-off when the Tel Aviv Stock Exchange reopens Monday.
• One bank executive said there is no sign of such a sanctions threat and hoped the remarks were election talk.

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Prime Minister Benjamin Netanyahu said Israel should prepare for possible banking sanctions. He said crypto and blockchain could be one way to deal with them.

Bank of Israel Rejects Netanyahu’s Proposal to Use Crypto to Evade Potential International Financial Sanctions

According to the Financial Times, the Bank of Israel publicly rejected Prime Minister Benjamin Netanyahu’s proposal to use cryptocurrencies to circumvent potential… pic.twitter.com/UrBtc3hlQ6

— Wu Blockchain (@WuBlockchain) October 25, 2026

He made the comments Friday in an interview with Israel’s Economy Channel. He said he had asked advisers to prepare a plan.

“You need to prepare an economy that can circumvent them,” he said. The remarks came after Britain and 11 other Western countries announced sanctions on goods from Israeli settlements in the West Bank.

Bank of Israel and Opposition Push Back

The Bank of Israel responded Saturday. It said cryptocurrencies “cannot be used as a route for bypassing sanctions.”

The central bank said Israel should keep its economic ties with main trade partners. It said preventing sanctions is the job of the political leadership.

Netanyahu later told Channel 14 that he heard the resistance and would take it into account. He added, “I listen, but I do what I think is best.”

Gadi Eisenkot, leader of the Yashar party, accused Netanyahu of “dismantling the Israeli economy.” He asked how an Israeli tech firm could receive overseas payments or investment under such a plan.

Naftali Bennett of B’Yachad said he was “horrified” by the idea. Avigdor Liberman of Yisrael Beytenu said blockchain transactions can be traced.

Liberman also said Netanyahu had blocked efforts to regulate the crypto industry in Israel. The comments came three days before elections.

Concern Grows in Israeli Markets

Senior figures in banking and capital markets told Israel Hayom they are worried. They pointed to possible disruption to international money transfers and pressure on bank shares.

One senior bank executive said he had no indication of such a threat. He hoped the remarks were only election rhetoric.

Officials said even partial limits on transfers could delay payments. Businesses could face extra checks and paperwork.

Investment managers said they are bracing for a possible sell-off when the Tel Aviv Stock Exchange reopens Monday. They said even the threat of sanctions could lead investors to review their holdings.

One capital markets figure said a 20% drop is possible if things are not calmed. Israel Hayom noted this was an extreme scenario from one source, not a consensus forecast.

Sources said the Bank of Israel and banks are expected to take steps to reassure markets if pressure builds. Foreign exchange trading also resumes Monday.

The bank executive said the Bank of Israel is already addressing the issue. A clearer picture should emerge once trading resumes on Monday.