The Bank of Israel issued a formal statement rejecting Prime Minister Benjamin Netanyahu's proposal to utilize cryptocurrency as a tool to bypass potential international sanctions. The central bank emphasized that digital assets cannot serve this purpose and urged the government to prioritize maintaining economic ties with primary trading partners to prevent the imposition of restrictive measures.
The proposal originated from an interview where Netanyahu suggested preparing for banking sanctions by developing a plan involving blockchain networks. While he did not specify the technical details or the assets involved, he later acknowledged the central bank's position while maintaining his intent to pursue what he deems best for the country.
The plan drew significant criticism from over 100 economists, including former central bank governor Jacob Frenkel and several Nobel laureates. They warned that such a strategy could lead to increased unemployment and a decline in foreign investment. Critics also noted that blockchain technology is transparent and traceable, making it ineffective for evading sanctions.
Political opposition leaders labeled the proposal as a move that could drive companies out of the country and compared it to the economic policies of Iran, Russia, and Venezuela. Meanwhile, Israel has previously utilized blockchain tracing to identify and sanction 37 crypto wallets containing over 24 million shekels, which were linked to Iran's Revolutionary Guards.
