Prime Minister Benjamin Netanyahu is drawing criticism from economists and political rivals after suggesting, in a television interview two days before Israel’s election, that the country could use cryptocurrency to help shield its economy from potential international sanctions, Reuters reported. In the interview with Channel 10 on Friday, Netanyahu said he was preparing for a scenario in which broader sanctions were imposed on Israel. There could be sanctions, and sanctions on banks, so you need to set up a bypass economy, he said. Asked whether he was referring to cryptocurrency, he replied: Very true, very true, adding that blockchain technology was another possibility.
The Bank of Israel issued a rare rebuke. Cryptocurrencies cannot serve as a route to bypass sanctions, the central bank said, and political leaders should focus on policy that would render such measures unnecessary. The right course for Israel’s economy is to preserve our economic relations with our main trading partners, and to focus on preventing sanctions and their negative impact on the economy, it said.
On Sunday, more than 100 economists, including former Bank of Israel officials, former governor Jacob Frenkel and several Nobel laureates, signed a letter expressing alarm at the proposal. They said it would lead to higher unemployment, a fall in foreign investment and damage to Israel’s economic standing in the world, Reuters reported in the fuller version of its dispatch.
The remarks land against a concrete sanctions backdrop. Last month Britain, France and Canada said they would block imports from Israeli settlements in the West Bank, the latest in a series of measures targeting settlement policy that has deepened Israel’s diplomatic isolation among some traditional allies. Netanyahu on Sunday continued to defend his record, urging voters to back him and saying he and President Donald Trump had two years left to work together to topple Iran’s rulers. No bypass mechanism has been proposed as policy: what exists is an interview answer, a central bank rejection, and an economists’ letter, two days before the vote.