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Israeli Prime Minister Benjamin Netanyahu says he has asked for a plan to use blockchain to navigate potential banking sanctions on Israel. “Blockchain is one of the alternatives, certainly,” he told Channel 10 on October 23, four days before the October 27 election.
“There could be sanctions, including banking sanctions,” Netanyahu said during the interview.
“You have to prepare an alternative economy and think about currencies that can get around those restrictions. I am working on that as well.”
When asked whether blockchain technology could provide a way to navigate such restrictions, Netanyahu confirmed that he had already requested a proposal.
“Blockchain is one of the alternatives, certainly,” Netanyahu said. “I have already asked for a plan to be prepared for that.”
He did not identify the officials or institutions responsible for developing the proposal, specify which cryptocurrencies or blockchain networks might be considered, or provide a timeline for its completion.
The comments indicate that Israel is examining contingency options for a potential deterioration in its international financial relationships. However, they do not establish that the government has adopted a cryptocurrency-based payment system or decided to use digital assets to circumvent any existing sanctions.
Banking sanctions generally restrict financial institutions’ ability to process transactions, provide services or maintain relationships with designated entities. Such measures can complicate international trade by making it more difficult for businesses to pay suppliers, settle invoices and access foreign currencies.
For a country dependent on international commerce, restrictions on banking channels could create additional costs for importers and businesses. Netanyahu’s proposal appears intended to explore alternatives before such restrictions become a broader economic problem.
The issue also intersects with uncertainty over future American support. Netanyahu said he believed Israel should prepare for the possibility that Washington’s current level of military assistance would not continue indefinitely, although he did not announce a specific change to the existing agreement.
Netanyahu’s proposal resembles efforts by other countries to use digital assets or alternative payment arrangements to maintain financial activity amid international sanctions. Venezuela, Russia, Iran and North Korea have all been associated with cryptocurrency-related activity intended, in different ways, to move or access funds outside conventional financial channels.
Venezuela developed the Petro, a state-backed digital currency initiative intended to support an alternative financial arrangement. The country has also used Bitcoin and Tether’s dollar-pegged USDT in parts of its economic activity, including transactions associated with its oil industry.
Russia provides another example. The report cited blockchain analytics firm Elliptic’s assessment that A7A5, a ruble-pegged token associated with a payments company co-owned by a sanctioned Russian state bank, processed approximately $102 billion in its first year.
That figure illustrates the potential scale of transactions involving alternative digital payment instruments. However, transaction volume alone does not establish how much economic value a country has preserved, how many transactions directly bypassed sanctions or whether such arrangements can remain viable under sustained regulatory pressure.
The same report said sanctions and a hack affecting A7A5’s main exchange reduced its daily trading volume by 96% from its peak, highlighting the vulnerabilities of these systems.
Banking sanctions can create incentives to seek alternative payment infrastructure, but cryptocurrencies do not automatically provide a reliable substitute for conventional banking. Their effectiveness depends on liquidity, access to exchanges, counterparties willing to transact, regulatory restrictions and the ability to convert digital assets into usable currencies.
Israel also has an existing connection to the cryptocurrency market through its banking sector. Bank Leumi, one of the country’s largest banks, plans to offer Bitcoin trading in early 2027 through Galaxy Digital, subject to approval from the Bank of Israel.
Netanyahu’s remarks come amid growing international scrutiny of Israeli policies, particularly those concerning the occupied West Bank and the war in Gaza.
According to the report, more than 60 Israeli economists and former officials warned in a statement reported by Ynet that measures initially directed at West Bank settlements could expand to affect the wider Israeli economy and increase living costs.
The United Kingdom announced restrictions on imports from Israeli settlements in early September 2026 and sanctions targeting individuals and companies involved in settlement construction, according to the supplied report. Eleven other countries, including France and Canada, were also reported to have expressed intentions to restrict trade in settlement goods.
These measures are distinct from comprehensive banking sanctions against Israel. Trade restrictions targeting specific goods, businesses or individuals do not necessarily prevent Israeli banks from operating internationally.
Nevertheless, the possibility that restrictions could broaden has raised questions about Israel’s economic exposure and its ability to maintain access to international markets.
The report also cited the findings of a United Nations commission of inquiry, which concluded in September 2025 that Israel was committing genocide in Gaza. The Israeli government has rejected accusations concerning its conduct in the conflict.
Separately, the International Criminal Court issued arrest warrants in November 2024 for Netanyahu and former defence minister Yoav Gallant over alleged war crimes and crimes against humanity in Gaza. The allegations and legal proceedings form part of the wider international pressure surrounding Israel’s actions.
Netanyahu also discussed the importance of preparing for a future in which the United States might be led by someone less supportive of Israel. He praised President Donald Trump’s relationship with the country and argued that Israel should prepare for a less favourable political environment.
“I can say with certainty that there has never been a president as friendly to Israel as Trump, and there may never be another like him,” Netanyahu said.
“We must prepare for a rainy day. I want independence in weapons production, just as I wanted energy independence.”
The prime minister also identified India as a potential partner in expanding cooperation on production, citing his relationship with Indian Prime Minister Narendra Modi. He did not provide details of any specific agreement.
The comments place the proposed blockchain plan within a broader strategy focused on economic resilience, domestic production and alternative international partnerships rather than cryptocurrency alone.
Despite the potential appeal of blockchain-based payments, cryptocurrency is not a guaranteed escape from international sanctions. Public blockchains can provide investigators with transaction records that help them trace the movement of digital assets between wallets, exchanges and other services.
Authorities can also impose restrictions on identifiable wallet addresses and work with cryptocurrency companies to freeze assets where the relevant technology and legal powers permit.
The report cited an Israeli enforcement action on July 1, when Defence Minister Israel Katz signed sanctions orders targeting 37 cryptocurrency wallets holding more than 24 million shekels. Israeli authorities said the wallets belonged to Iran’s Islamic Revolutionary Guard Corps and were intended to finance Hezbollah.
The head of Israel’s counter-terror financing bureau stressed that cryptocurrency transactions do not place suspected financiers beyond the reach of enforcement.
“There is no immunity for terror financiers even in the crypto sphere,” the official said, according to the report.
Stablecoin issuers can also play a role in enforcement. Tether, the company behind USDT, has the technical ability to freeze tokens held at specified blockchain addresses. The report said Tether froze $344 million in April in cooperation with US authorities and another $131 million in July in wallets linked to Iran’s central bank and armed forces following US sanctions.
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