Prime Minister Benjamin Netanyahu , who faces re-election this week, is drawing criticism from economists and political rivals after suggesting Israel could use cryptocurrency to help shield its economy from potential international sanctions.
In an interview with Israel’s Channel 10 on Friday, Netanyahu said he was preparing for a scenario in which broader sanctions were imposed on Israel.
“You know, there are currencies that can bypass (sanctions). We are also working on that. On Sunday, more than 100 economists, including former Bank of Israel officials, ex-central bank governor Jacob Frenkel and several Nobel laureates, signed a letter expressing alarm over Netanyahu’s proposal.
Last month, Britain , France and Canada said they would block imports from Israeli settlements in the West Bank in what was the latest in a series of actions targeting Israel’s settlement policy, underscoring its growing diplomatic isolation among some of its traditional allies. “There could be sanctions, and sanctions on banks so you need to set up a bypass economy,” Netanyahu said. The comments drew a rare rebuke by the Bank of Israel, which said crypto currencies cannot serve as a route to bypass sanctions and that 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. They said it would lead to higher unemployment, a fall in foreign investment and the collapse of Israel’s economic standing in the world. Netanyahu’s main rival in Tuesday’s election, Gadi Eisenkot, called the crypto plan “madness” and said he feared that the “BibiCoin policy” would drive companies abroad and undermine national security.
