Bank of Israel Rejects Crypto for Sanctions Evasion

The Bank of Israel issued an official statement dismissing the idea of using cryptocurrencies as a tool to bypass international sanctions. The institution stated that digital assets lack the capacity to circumvent restrictions imposed on the country. The agency advocates for maintaining economic relations with strategic trade partners.

Prime Minister Benjamin Netanyahu previously suggested creating a plan involving blockchain networks to protect the national economy. He mentioned the technology as a viable alternative should the country face banking sanctions. The government did not detail which currencies or networks would be used in this strategy.

More than 100 economists, including former Central Bank president Jacob Frenkel, signed a letter repudiating the proposal. The group warns that the measure could result in increased unemployment and the flight of foreign investments. Experts compared the initiative to practices adopted by isolated regimes globally.

Financial sector analysts highlight that the transparency inherent in blockchain systems prevents the anonymity needed to bypass sanctions. Every transfer made on these networks is recorded and can be traced to its origin. The State of Israel itself already uses blockchain tracking to locate sanctioned groups.

The debate occurs just days before national elections. The political opposition classified the suggestion as a threat to economic stability and the country's reputation in the global market.