Netanyahu Says He Requested a Blockchain Plan for Possible Sanctions. Economic Officials Told Ynet They Know of None

Prime Minister Benjamin Netanyahu says he has asked for a plan that uses blockchain to help Israel's economy withstand possible international banking sanctions. He said it in an interview with Roy Katz on Israel's Channel 10, broadcast Friday, Oct. 23. Israelis vote in a national election on Tuesday, Oct. 27.

The quote is short. "We need to understand that there could be sanctions, including banking sanctions. You need to prepare an economy that can bypass them," Netanyahu said. He added: "you know about the currencies that bypass this," and that he was working on it.

Katz asked whether blockchain was one alternative. Netanyahu answered: "One of them, certainly. I have already asked for a plan to be prepared for that."

What Netanyahu has not said

He did not say who is drafting the plan, which network or currency it would use, or when it could take effect. No agency has been named. No payment system has been announced. What exists, on the public record, is a request.

Ynet reports that no official in the economic ministries has heard of such a plan. It also reports that even senior officials in the Prime Minister's Office are unaware of any team working on it.

Why banking and finance veterans are skeptical

Yair Avidan, a former supervisor of banks at the Bank of Israel, was blunt. "Blockchain is not a way to circumvent sanctions," he told Ynet. Moving a transaction onto a blockchain or using a digital token "does not allow sanctions to be bypassed, does not create an alternative economy, does not nullify legal prohibitions."

Avidan's core argument is practical. A blockchain moves value only if banks, payment providers and trading partners are willing to connect to it. Under sanctions, those parties answer to their own legal and compliance exposure.

Yarom Ariav, a former senior Finance Ministry official, compared the idea to Iran's approach, according to Ynet. Ynet's headline quotes economists calling the proposal "dangerous and irresponsible" and warning it could isolate Israel.

The technical limits are well documented. Tokens can move without a bank. Turning them into usable cash for a supplier runs through exchanges, stablecoin issuers and fiat on-ramps, and those remain regulated. Most large stablecoins are issued by US-regulated companies that can freeze addresses, and public ledgers make transfers traceable.

Nir Hirschman, CEO of Israel's Crypto Companies Forum, acknowledged the conversion problem. Britain's Office of Financial Sanctions Implementation said in January that using cryptoassets to evade sanctions is treated no differently from exploiting traditional currencies.

The sanctions picture

Netanyahu's stated premise is that banking sanctions could come. Avidan agrees the risk is real. He said sanctions could damage banking relationships, trade, credit and investment.

But nothing on the public record shows Israeli banks being cut off. A September 2026 briefing from the UK House of Commons Library counted 38 restrictions, covering settlement activity, certain weapons transfers and individuals tied to settler violence. None involve cutting off Israeli banks.

The Jewish People Policy Institute counted 139 sanctions, restrictions and diplomatic measures against Israel across 64 countries and entities as of Oct. 18. The US accounted for 15, the most of any country. The Jerusalem Post noted that the count includes proposed congressional restrictions and academic boycotts, not only enacted government sanctions.

On Oct. 19, British Foreign Secretary Ed Miliband warned businesses against bidding on construction in the E1 settlement project in the West Bank.

The International Monetary Fund described Israel's banking sector in July 2026 as well-capitalized and liquid. It also urged tougher anti-money-laundering and counter-terror-financing measures. The Bank of Israel published an update to its Directive 411 on Oct. 7. The directive covers how banks manage money-laundering and terror-financing risk, and its July draft addressed virtual currency activity.

Aid, defense spending and the next administration

The interview was mostly about security. Netanyahu said US military aid is "only a matter of time" before it ends, and that Israel must be able to manufacture its own weapons and ammunition. He said he has allocated an additional 400 billion shekels, about $129 billion, to defense over the coming years. He also said Israel should prepare for a less friendly US administration after President Donald Trump leaves office.

The current aid arrangement is a 2016 memorandum covering fiscal 2019 through 2028. It totals $38 billion: $33 billion in foreign military financing grants and $5 billion for missile defense.

Netanyahu's framing is that contingency planning is responsible when the country's finances and arms supply depend on partners whose policies can shift. He called blockchain only one option among several. Critics answer that a plan nobody in the economic ministries has seen is not yet a plan.

It is not yet known whether any ministry, the Bank of Israel or the Prime Minister's Office will identify who is drafting the blockchain plan. The Bank of Israel has also worked on a digital shekel for several years. No one has said whether that project is connected to Netanyahu's request. The vote is Tuesday, Oct. 27.