Netanyahu faces backlash over cryptocurrency proposal

Israeli Prime Minister Benjamin Netanyahu has drawn criticism from economists and political opponents after suggesting that cryptocurrency could help protect the country’s economy from potential international sanctions ahead of this week’s election.

In an interview with Israel’s Channel 10 on Friday, Netanyahu said he was preparing for a scenario in which broader sanctions could target Israel. He argued that the country would need alternative ways to sustain its economy if restrictions affected its banking system.

“There could be sanctions, and sanctions on banks, so you need to set up a bypass economy,” Netanyahu said, referring to currencies that could help circumvent such restrictions.

When asked whether he meant cryptocurrency, Netanyahu agreed and added that blockchain technology was another possibility.

His comments come amid growing diplomatic tensions over Israel’s policies. In September, Britain, France and Canada announced plans to restrict imports from Israeli settlements in the occupied West Bank, adding to pressure from some of Israel’s traditional allies.

The Bank of Israel issued a rare rebuke of Netanyahu’s proposal, warning that cryptocurrencies could not provide a reliable way to bypass sanctions. It urged political leaders to focus on preventing such measures and preserving the country’s economic relationships with major trading partners.

Inflation: LPG price hike pushes up food costs across Pakistan

“The right course for Israel’s economy is to preserve our economic relations with our main trading partners,” the central bank said, stressing the need to prevent sanctions and their potential economic consequences.

On Sunday, Netanyahu defended his record and urged voters to support him. He also said he and US President Donald Trump had two years left to work together to topple Iran’s rulers.

More than 100 economists, including former Bank of Israel officials, former central bank governor Jacob Frenkel and several Nobel laureates, signed a letter on Sunday expressing concern over Netanyahu’s proposal.

They warned that international sanctions could increase unemployment, reduce foreign investment and weaken Israel’s position in the global economy.

Citing countries such as South Africa, Iran and Russia, the economists said sanctions could sharply reduce living standards and undermine the government’s ability to finance national security and defence.

The signatories also argued that relying on cryptocurrency would not resolve the economic risks associated with international isolation.

Netanyahu’s main rival in Tuesday’s election, Gadi Eisenkot, described the proposal as “madness”. He warned that what he called the “BibiCoin policy” could drive companies overseas and undermine national security.

Opposition leader Yair Lapid also criticised Netanyahu, arguing that his approach risked worsening the country’s economic outlook. Lapid warned that Israelis could face severe shortages and long queues for basic goods if the economy deteriorated.

Opinion polls suggest the election could produce a political stalemate, with neither Netanyahu’s governing coalition nor the opposition alliance securing a clear parliamentary majority.