More than 100 economists, including former Bank of Israel governor Jacob Frenkel and several Nobel laureates, signed a letter on Sunday warning that Prime Minister Benjamin Netanyahu’s proposal to use cryptocurrency to bypass possible international sanctions would collapse Israel’s economic standing in the world.
The signatories, who include former Bank of Israel officials, said the plan would lead to higher unemployment and a fall in foreign investment. “As we have seen in countries that have suffered similar sanctions, such as South Africa, Iran, and Russia, the living standards of Israeli citizens would plummet dramatically, and the state’s ability to finance its security and defend itself against its enemies would be severely damaged,” the letter read.
“Netanyahu is knowingly leading the State of Israel toward boycott and international economic isolation, and all he has to offer the Israeli economy is a puzzling solution, one accepted in criminal organizations, that will not help in the slightest,” the letter said.
The Proposal
Netanyahu raised the idea in an interview with Israel’s Channel 10 on Friday, saying he was preparing for a scenario in which broader sanctions were imposed on Israel. Last month, Britain, France and Canada said they would block imports from Israeli settlements in the West Bank, in the latest of a series of actions targeting Israel’s settlement policy.
“There could be sanctions, and sanctions on banks so you need to set up a bypass economy,” Netanyahu said. “You know, there are currencies that can bypass (sanctions). We are also working on that.” Asked whether he was referring to cryptocurrency, he replied: “Very true, very true,” adding that blockchain technology was another possibility.
The comments drew a rare rebuke from the Bank of Israel itself, which said cryptocurrencies 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,” the central bank said.
The Prime Minister’s Defence, And His Rivals
Netanyahu on Sunday continued to defend his record, urging voters to back him and saying he and U.S. President Donald Trump had two years left to work together to topple Iran’s rulers.
His 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. Opposition leader Yair Lapid said: “Netanyahu has gone off the rails … He promises the citizens of Israel before these elections that they’ll be standing in line for an hour and a half for bread, like in Russia and Iran.”
Two Days Out
The letter lands two days before Israelis vote on Tuesday, October 27. Opinion polls point to a potential stalemate, with neither Netanyahu’s ruling coalition nor an opposition alliance securing the 61 seats needed for a governing majority in the 120-seat Knesset. The final surveys, published Friday before the polling blackout, are covered in the Daily’s report on the final polls.
Sources: Reuters.
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