Israel’s central bank and opposition politicians criticized Prime Minister Benjamin Netanyahu after he said in an interview with an Israeli channel on Friday that the country needed to prepare an alternative economic system to avoid potential banking sanctions. The remarks came as Israel faced mounting international pressure over its government’s policies in the occupied West Bank, the Financial Times reported.

Netanyahu identified cryptocurrencies as one possible tool for such a system and said he was already working on the issue.

Central bank rejects sanctions-evasion proposal

Israel’s central bank said cryptocurrencies “cannot serve as a means to circumvent sanctions imposed on Israel.” It urged the country’s political leadership to preserve economic ties with major trading partners and focus on preventing potential restrictions.

“The right course of action for the Israeli economy is to preserve economic relations with our main trading partners and focus efforts on preventing sanctions and their negative impact on the economy,” the central bank said.

The United Kingdom, France, Canada, the Netherlands and Spain have imposed or pledged to impose restrictions in response to the expansion of Israeli settlements and settler attacks on Palestinians, according to the Financial Times.

Netanyahu also warned that Israel could face a less favorable U.S. administration after President Donald Trump’s term ends. He said U.S. military aid to Israel would probably decline because “America has changed.”

Opposition warns of international isolation

Gadi Eisenkot, Netanyahu’s main political rival and leader of the centrist Yashar party, accused the prime minister of “dismantling the Israeli economy.”

“Netanyahu has lost touch with reality. He has retreated into a world of illusions, offering a ‘solution’ to the international isolation he himself created — by cutting Israel off from the global economy,” Eisenkot wrote.

Yair Lapid of the centrist opposition group B’Yahad compared Netanyahu’s proposed “bypass economy” with systems used by countries that have limited access to international financial networks, including Iran, Russia and Venezuela.

Eran Yashiv, a professor of economics at Tel Aviv University, called the idea of using cryptocurrencies to circumvent sanctions irresponsible. He said such statements created the impression that Israel’s leadership was prepared to take extreme measures.

Israel authorized the issuance of a shekel-pegged stablecoin in April 2026.

Source: Incrypted