Netanyahu: Israel should ready for global sanctions, use blockchain to circumvent them

Prime Minister Benjamin Netanyahu said Friday that Israel should prepare for mounting international sanctions and use cryptocurrency in order to circumvent them, in shockingly blunt remarks regarding the state of the country’s economy less than a week before the Knesset election.

“You have to understand that there could be banking sanctions,” he told the Channel 10 economic network in an interview. “You need to prepare an economy that can circumvent them… and I’m working on that as well.”

After the interviewer proposed cryptocurrency as a possible solution, Netanyahu responded in the affirmative.

Asked about blockchain — a decentralized digital system that does not rely on central government authorities — Netanyahu said it’s another option and that he had asked his advisers to prepare a plan for its utilization.

Cryptocurrency can weaken the effectiveness of financial sanctions by creating alternative payment channels, but it is not foolproof, as transactions on many blockchain networks can still be traced.

A senior Israeli economic official quoted by Channel 12 criticized the proposal, saying: “The idea will certainly not achieve its goal. Even talking about it could harm the economy.”

Netanyahu’s remarks came after Britain and 11 other Western countries announced sanctions targeting goods from Israeli settlements in the West Bank in response to a wave of settler attacks on Palestinians and massive settlement construction approved by Netanyahu’s right-wing government.

While the UK-led sanctions are designed to specifically target the settlements, economists and industry figures interviewed by The Times of Israel last month nevertheless warned that the economic repercussions could extend into Israel proper.

Netanyahu seemed to frame the economic reality as unavoidable, leading his rivals to pounce on the opportunity to argue that his government’s policies are what have led Israel to unprecedented international isolation.

Netanyahu, who has previously called for Israel to become self-sufficient militarily, said that multibillion-dollar weapons packages from Washington “won’t keep coming.”

“If you think we will continue receiving what I twice secured — which is tens of billions of dollars in American aid for the defense budget — prepare yourselves and get used to [the fact that it won’t happen anymore] because America has changed. Not because Israel has [changed]. It’s over, and it will be over. It’s just a matter of time,” Netanyahu added.

The prime minister has long argued that decreased public support in the US for Israel is a result of internal dynamics that don’t have to do with the Jewish state, while some of his critics have faulted his policies for exacerbating that decline.

Opposition Leader and B’Yachad party No. 2 Yair Lapid seized on Netanyahu’s interview, writing on X that the premier “now admits, in his own words: if his government is reelected, American security aid will come to an end and Israel will face sanctions that would devastate our economy, lead to runaway price hikes, and cause irreparable damage.”

The Democrats leader Yair Golan also attacked Netanyahu, writing on X: “Netanyahu in yet another detached and hysterical performance. The man has lost it.”

“There is a very simple way to avoid economic sanctions: fight Jewish terrorism that is destroying our standing in the world, return to being a respected country in the family of nations, get rid of people who lack qualifications, build a better future and preserve our strategic alliances,” Golan wrote.

Netanyahu’s Friday admission was similar to one he made last year when he said Israel is facing increasing isolation on the world stage and will have to become a more self-reliant “super-Sparta” in the years to come.

But after those remarks sparked an uproar, he tried to walk them back and proceeded to highlight the support that Israel still enjoys from India and countries in Latin America.