The Bank of Israel rejected Prime Minister Benjamin Netanyahu’s proposal to use cryptocurrencies and blockchain networks to circumvent potential international sanctions against the country.
The central bank warned that digital assets cannot be used to bypass these restrictions and argued that Israel must preserve its trade relationships and work to prevent sanctions from being imposed.
Netanyahu had said in an interview that he requested the development of a cryptocurrency-based plan to prepare for potential banking restrictions. However, he did not specify which blockchain or currency would be used or who would be responsible for developing the proposal.
More than 100 economists, including former central bank governor Jacob Frenkel and several Nobel laureates, signed a letter opposing the initiative. They warned that it could increase unemployment in Israel and discourage foreign investment.
Opposition candidate Gadi Eisenkot called the proposal “madness” and dubbed it the “BibiCoin” policy. Meanwhile, Yair Lapid compared Netanyahu’s proposed economic model to those of Iran, Russia, and Venezuela.
The controversy erupted just days before Israel’s national election, scheduled for October 27. Experts also questioned the plan’s technical feasibility, as transactions recorded on public blockchains can be traced.
Source: https://www.ft.com/content/39e475e7-0392-4856-aaaf-5ab3e35b8215
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