Netanyahu Says He Asked for Crypto Plan to Bypass Potential Banking Sanctions on Israel

Israeli Prime Minister Benjamin Netanyahu stated on Israel's Channel 10 that he has requested a plan to use cryptocurrency and blockchain networks to bypass potential banking sanctions. Speaking four days ahead of Israel's October 27 national election, he did not specify who is drafting the proposal, when it would be completed, or which currency or network it would use. Netanyahu warned that US military funding will eventually end and said Israel must prepare an alternative economy for a period after President Donald Trump leaves office. The current $3.8B-a-year US defense aid agreement is set to expire in September 2028, and Netanyahu noted that Israel is also discussing weapons production cooperation with Indian Prime Minister Narendra Modi.

The comments come after more than 60 Israeli economists and former officials warned this week, per Ynet, that trade restrictions targeting West Bank settlements could expand to the broader Israeli economy. Following the war in Gaza, the UK banned imports from Israeli settlements in early September and sanctioned associated individuals and companies, while 11 other nations, including France and Canada, stated plans to restrict settlement trade. Other sanctioned nations have previously turned to digital assets to move funds outside Western banking rails, though public blockchains and centralized stablecoins remain traceable and subject to freezes. According to Elliptic, Russia's ruble-pegged A7A5 token processed about $102B in its first year before sanctions and an exchange hack cut its daily volume by 96%, while Tether froze $131M in wallets linked to Iran's central bank and armed forces in July after US sanctions. "There could be sanctions, including banking sanctions. You have to prepare an alternative economy and think about currencies that can get around those restrictions. I am working on that as well." — Benjamin Netanyahu, Prime Minister of Israel