Bank of Israel Rejects Netanyahu's Crypto Sanctions Plan, Says Crypto Cannot Bypass Sanctions

Published October 25, 2026, 9:20 AM PKT. Based on the Bank of Israel's statement of October 24, 2026 (primary source), as reported by the Times of Israel and Channel 10, and reporting by The Media Line, Channel 14, CryptoNews, Startup Fortune, CoinScreamer and QNC News (secondary sources), all October 24-25, 2026. This is a follow-up to MABOnChain's October 24 report on Prime Minister Benjamin Netanyahu's blockchain plan request.

Israel's central bank publicly rejected Prime Minister Benjamin Netanyahu's suggestion that cryptocurrency could help the country work around possible banking sanctions, issuing a rare rebuke of its own prime minister on Saturday evening, October 24, 2026. The Bank of Israel said cryptocurrencies cannot serve as a route to bypass sanctions, and urged the political leadership to focus on preventing sanctions and preserving trade relationships instead, according to the Times of Israel and Channel 10 reporting cited by multiple outlets. Netanyahu answered the same evening, saying crypto is one possible tool among others and may never be used, according to Channel 14.

The central bank's Saturday statement

The Bank of Israel's statement was blunt, and it was issued after the central bank received numerous media inquiries during the Sabbath, according to Channel 14. "Cryptocurrencies cannot serve as a route to bypass sanctions," the bank said, according to the Times of Israel. The bank added that "the right thing for Israel's economy is to preserve economic relations with our main trading partners and to focus on preventing sanctions and their negative impact on the economy," according to the same reporting. "This issue falls within the purview of the political echelon, and it is appropriate to take action to advance it," the bank said, placing responsibility for preventing sanctions squarely on the government, according to The Media Line.

The bank went further in its reasoning, according to The Media Line's account of the statement. Operating in the global economy solely through cryptocurrencies is not possible, the bank said, and it is better to focus on preventing sanctions than on building routes around them. CryptoNews summarized the message the same way: cryptocurrencies cannot serve as a means to circumvent sanctions, and the burden sits with politicians to prevent sanctions rather than route around them.

Netanyahu's answer the same evening

Netanyahu did not back down, but he softened the claim that had drawn the rebuke. Speaking to Channel 14 on Saturday evening, he said: "We have other means; crypto is one of them, it is not the sole method, and it is not certain that it will actually be used," according to CryptoNews and QNC News. "I thank the Bank of Israel for their advice, but I do what I think is right," he added, according to CryptoNews. QNC News reported the same exchange, noting that Netanyahu said he hears the objections and takes them into account, but listens and does what he thinks is right.

The exchange is unusual in itself. A central bank publicly contradicting its own prime minister's economic contingency plan, and the prime minister publicly answering the bank the same night, is the kind of open disagreement that rarely reaches the public in those terms. Governor Amir Yaron leads the Bank of Israel, according to Startup Fortune, and the statement was issued under the bank's name rather than attributed to an individual official in the reporting.

The October 23 interview that started it

The dispute began with Netanyahu's interview on Channel 10 on Friday, October 23, 2026, which MABOnChain reported the same day. Asked about the possibility of banking sanctions, Netanyahu said: "You have to understand that there could be banking sanctions. You need to prepare an economy that can circumvent them, and I am working on that as well," according to CryptoNews. Pressed on whether blockchain was the answer, he said: "One of them, certainly. And I have already requested that a plan for this should be prepared," according to Channel 14 and C14 News.

The interview came a day after Britain and eleven other Western countries announced sanctions on goods from Israeli settlements in the West Bank, following a wave of settler attacks, according to CryptoNews. The measures target the settlement economy specifically, but Israeli economists have warned for weeks that the fallout could spill into the wider economy, according to the same report. Netanyahu also used the interview to warn that the tens of billions of dollars in annual American defense aid "won't keep coming," telling viewers that "America has changed, it is over, and it will be over, it is just a matter of time," according to CryptoNews.

One detail in the reporting undercuts the impression that a plan is already in motion. Officials in Israel's economic ministries and senior figures in the Prime Minister's Office told reporters they were not aware any such operational group existed, according to Ynet reporting cited by Startup Fortune. A prime minister announced a sanctions workaround on live television that his own government apparently had not built yet, Startup Fortune noted.

What the dispute does and does not change

Nothing in the weekend exchange amounts to a policy decision, and readers should not mistake it for one. No blockchain plan has been published, no network, token or implementation timetable has been announced, and Israel has not been disconnected from the international banking system, according to CoinScreamer's summary of the situation. The central bank's statement is not a decision to introduce a new cryptocurrency, and Netanyahu's remarks are not an announcement that the country has adopted one. What changed is the public record: the central bank has now said on the record that the crypto route does not work, and the prime minister has now said on the record that it is only one option and may never be used.

The political reaction followed the same lines. Opposition leader Yair Lapid accused Netanyahu of acknowledging that another term for his government would lead to the loss of American military assistance and sanctions that would severely damage the economy, according to The Media Line. Lapid warned that such an outcome would cause prices to soar and inflict irreparable economic damage, and argued that replacing the government could preserve United States support and prevent sanctions, according to the same report.

For the crypto angle, the episode is a useful reality check. A head of government floated blockchain as a national sanctions workaround, and his own central bank answered within a day that the tool cannot do that job. The story now turns on whether any plan is ever produced, and whether the government acts on the bank's advice to prevent sanctions rather than prepare routes around them.

This article is news reporting and is not investment advice.

Sources

• Bank of Israel, statement (October 24, 2026), primary source, as reported by the Times of Israel and Channel 10
• The Media Line, Bank of Israel Rejects Netanyahu Cryptocurrency Plan To Bypass Sanctions (October 24, 2026), secondary source
• Channel 14 / C14 News, Bank of Israel Rejects Netanyahu's Crypto Sanctions Plan (October 24, 2026), secondary source
• CryptoNews, Bank of Israel Rejects Netanyahu's Plan to Use Crypto to Circumvent Sanctions (October 24, 2026), secondary source
• Startup Fortune, Bank of Israel publicly rejects Netanyahu's plan to dodge sanctions with crypto (October 25, 2026), secondary source
• CoinScreamer, Bank of Israel Rejects Netanyahu's Crypto Sanctions Proposal (October 24, 2026), secondary source
• QNC News, Bank of Israel Rejects Netanyahu Crypto Plan to Sidestep Possible Banking Sanctions (October 24, 2026), secondary source