Bank of Israel: Cryptocurrencies Cannot Circumvent Sanctions — Response to Netanyahu's Proposal

The Bank of Israel stated on Saturday that cryptocurrencies cannot be used to circumvent potential economic sanctions. This statement was a response to an interview with Prime Minister Benjamin Netanyahu, who discussed plans to prepare alternative financial mechanisms, including the use of cryptocurrencies. Opposition leaders Yair Lapid and Yoav Horowitz criticized Netanyahu's remarks, warning of severe economic consequences. The exchange took place three days before the Knesset elections, amid growing debates about the economic impact of Netanyahu's policies and increasing European calls for measures against Israel due to the Gaza war and settlement activities. The Bank of Israel said on Saturday that cryptocurrencies cannot be used to circumvent possible economic sanctions. The statement was a response to an interview by Prime Minister Benjamin Netanyahu, who spoke of plans to prepare alternative financial mechanisms. The opposition criticized the head of government's words three days before the Knesset elections.

Aziz KarimovFirst published on tafs uz 25 October 2026 at 15:214 min read

The key facts

Bank of Israel stated that cryptocurrencies cannot serve as a route to bypass sanctions
The Bank of Israel stated that cryptocurrencies cannot become a route for circumventing sanctions
Netanyahu proposed preparing cryptocurrency plans in case of economic and banking sanctions
Opposition leaders Yair Lapid and Yoav Horowitz warned of economic consequences of such statements
Opposition members Yair Lapid and Yoav Horowitz warned of the economic consequences of such statements

Central bank rejected the cryptocurrency plan in case of sanctions

The Bank of Israel stated on Saturday that cryptocurrencies cannot be used to circumvent potential economic sanctions, according to Anadolu Agency citing the state broadcaster. The central bank's response followed an interview with Prime Minister Benjamin Netanyahu on Israel's business channel on Friday: he suggested using cryptocurrencies as part of contingency plans for possible economic and banking sanctions. According to the broadcaster, the bank emphasized that cryptocurrencies 'cannot be used as a route to bypass sanctions'.

The central bank's position and the prime minister's words

According to Anadolu, the bank stated that 'the right solution for Israel's economy is maintaining economic relations with major trading partners and focusing on preventing sanctions and their negative impact on the economy.' The central bank also emphasized that this issue falls under the responsibility of political leadership and called for efforts to prevent sanctions and limit their consequences.

What Netanyahu said

Netanyahu expressed concern about possible economic and banking sanctions. He explained that one of the emergency contingency plans prepared under his order included the use of cryptocurrencies. The prime minister also warned that American aid could cease and Washington's stance toward Israel could change after President Donald Trump leaves office.

Opposition criticism

Opposition leader Yair Lapid criticized the prime minister's remarks: 'Netanyahu's statement is insane, but it is true: if his government is elected, military aid will stop, and Israel will face severe economic sanctions.' Yoav Horowitz, former head of the prime minister's office and co-founder of the opposition party 'Yashar', warned of economic consequences in an interview with the state broadcaster and said that the reaction to Netanyahu's words would become clear on Sunday and Monday. 'We will see how organizations withdraw their money from here,' he stated, adding that instead of explaining how to prevent sanctions, the prime minister is discussing what to do once they are already imposed. Horowitz also said: 'Netanyahu, Ben-Gvir, and Smotrich are equivalent to sanctions', referring to National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich, and warned that Netanyahu's words could deter people from living in Israel, starting businesses, opening bank accounts, and making investments.

Election context and European measures

The exchange of statements occurred three days before Tuesday's Knesset elections, amid growing debates about the possible economic consequences of Netanyahu's policies and Israel's trade and financial relations. As Anadolu notes, European calls for measures against Israel intensified during the war in the Gaza Strip and settlement activities in the occupied West Bank, though EU countries differ in assessing the scale of such measures. In September 2025, the European Commission proposed suspending part of Israel's trade preferences under the bilateral association agreement, as well as sanctions against extremist Israeli ministers and freezing EU bilateral support, except for assistance to civil society and Yad Vashem. In May 2026, EU foreign ministers agreed on sanctions against Israeli settlers and organizations supporting settlement activities, while disagreements persisted regarding broader economic measures.

Why this matters

The central bank's statement is a rare case of the regulator publicly diverging from the prime minister on the issue of the country's economic security, and it came just before the Knesset elections. For Israeli businesses and citizens, the practical meaning of the dispute is clear: according to Horowitz, such remarks may already push investors and depositors to move their funds abroad. At the same time, confirmed facts show that part of the EU measures — sanctions against settlers and organizations — was already agreed in May 2026, making the sanctions issue not hypothetical but part of the current agenda.