Bank of Israel rejects Netanyahu’s crypto proposal on October 24, as opposition leaders warn potential sanctions could threaten Israel’s economy and investment.
The Bank of Israel rejected Prime Minister Benjamin Netanyahu’s crypto proposal on Saturday, October 24, 2026. According to Financial Times, the central bank said that crypto cannot circumvent international sanctions and called on leaders to safeguard economic relations. Opposition leaders, meanwhile, cautioned that the plan would undermine investor confidence and economic uncertainty.
Netanyahu Raises Crypto Proposal Before Central Bank Responds
Netanyahu spoke about potential international banking sanctions in a television interview on Friday, Oct. 23. He had asked for a plan that would look at blockchain technology and cryptocurrencies as a viable alternative. However, he did not announce a completed plan or confirmed implementation schedule.
The Bank of Israel, in public, denied on the next day that cryptocurrency is a means to evade sanctions. Rather, it called on the government to maintain ties with key trading partners. The bank also urged political leaders to not impose restrictions and to keep their economic effects minimal.
Later, Netanyahu addressed the criticism on Saturday, October 24. He has said that he will take into account the central bank’s recommendations and take his own decision.
The conflict has erupted as international criticism of Israel’s policies has been rising. European countries have talked about measures related to settlement activities in the occupied West Bank. Meanwhile, the Gaza war has put pressure on Israel’s diplomats.
Netanyahu also threatened to eventually reduce U.S. military aid. He said that Washington’s strategy may shift once President Donald Trump has left office. But these comments were about what might happen in the future, not about any policy changes.
Opposition Leaders Warn of Possible Economic Consequences
Opposition leader Yair Lapid lashed out at Netanyahu’s comments and threatened sanctions. He said that such measures could jeopardize security cooperation and Israel’s economic security.
Yoav Horowitz, a former prime minister’s office chief, also raised the prospect of financial repercussions. He told the public broadcaster that reactions may be more evident on Sunday, October 25, and Monday, October 26.
Investors and financial institutions may pull out of Israel, Horowitz suggested. He said the government should clarify its measures to avoid sanctions. In addition, he cautioned that the lack of certainty would deter businesses and investors.
Former finance minister Avigdor Liberman also objected to the plan. He said the government should not be getting ready for international isolation, but preventing it.
On Sunday, October 25, a forum of 109 economists, business executives, and former public officials expressed serious concerns. The group cautioned that banking restrictions would have a negative impact on exports, investments and Israel’s technology industry. It also brought up issues regarding access to necessary medical equipment and medicines.
The warnings underscore Israel’s vulnerability as an economy that is open to the world. Technology firms rely particularly on foreign investment, foreign customers and existing banking networks.
The debate is taking place before the Knesset elections on Tuesday, October 27. As a result, economic stability and international relations have become campaign issues.
European Union foreign ministers agreed in May 2026 to sanctions against violent Israeli settlers and groups that support settlement activities. But the bloc’s 27 member countries are split on more sweeping economic measures.
The Bank of Israel’s reaction ultimately underscores the fact that cryptocurrencies are not an effective tool for circumventing sanctions. Diplomatic relations, investor confidence and decisions by international partners will also affect Israel’s economic outlook.
Bilal Hassan is a seasoned crypto journalist with over five years of experience covering blockchain, digital assets, and global fintech trends. His work focuses on market developments, regulatory shifts, and the evolving landscape of cryptocurrency adoption worldwide.
