Netanyahu Explores Cryptocurrency as Hedge Against Potential Sanctions
Israeli Prime Minister Benjamin Netanyahu has initiated a plan to explore the use of cryptocurrency and blockchain networks as a potential strategy to circumvent future banking sanctions. The remarks were made during an interview with Israel’s Channel 10, just days before the nation’s general election.
Netanyahu expressed a degree of certainty that U.S. military funding to Israel could cease, stating, “It is only a question of time.” He urged Israelis to prepare for a future where the country might no longer receive “tens of billions of dollars in American assistance” for its defense budget.
“There could be sanctions, including banking sanctions,” Netanyahu elaborated. “You have to prepare an alternative economy and think about currencies that can get around those restrictions. I am working on that as well.”
Cryptocurrency and decentralized technologies are being considered as one of these alternatives. “Blockchain is one of the alternatives, certainly,” Netanyahu confirmed when questioned about its potential to bypass sanctions. “I have already asked for a plan to be prepared for that.”
Details regarding who is developing the plan, the specific currency or network to be employed, and the timeline for its readiness were not provided. Should Israel proceed, it would join a select group of nations, including Venezuela, Iran, Russia, and North Korea, which have previously utilized cryptocurrency to move funds beyond the reach of U.S. oversight.
Netanyahu’s exploration of a blockchain-based strategy echoes that of Venezuelan President Nicolás Maduro, who not only devised a similar plan but also established a comprehensive legal framework around the concept. Venezuela has employed Tether and Bitcoin to support its oil industry and launched the Petro cryptocurrency in an effort to shift its economy away from the SWIFT international payment system.
Russia also pursued a comparable path with A7A5, a ruble-pegged token from a payment firm partially owned by a sanctioned state bank. According to Elliptic, it facilitated approximately $102 billion in transactions during its first year before sanctions and an exchange hack led to a 96% reduction in its daily volume from its peak. In Israel, Bank Leumi, the country’s largest bank, has indicated plans to offer Bitcoin trading in early 2027, pending approval from the Bank of Israel, in partnership with Galaxy Digital.
Banking sanctions typically involve foreign banks refusing to process payments for a country’s financial institutions, thereby complicating payments for importers to their suppliers and potentially driving up consumer prices.
This development comes amid warnings from over 60 Israeli economists and former officials who cautioned this week that measures currently targeting West Bank settlements could expand to the broader economy, increasing the cost of living, according to Ynet. The United Kingdom banned imports from Israeli settlements in early September and announced sanctions against individuals and companies involved in their construction. Eleven other countries, including France and Canada, have also declared their intention to restrict trade in settlement goods.
These pressures follow the conflict in Gaza. A UN commission of inquiry concluded in September 2025 that Israel was committing genocide in Gaza. Separately, the International Criminal Court issued arrest warrants in November 2024 for Netanyahu and former defense minister Yoav Gallant over alleged war crimes and crimes against humanity in Gaza, allegations that Netanyahu has stated Israel will not recognize.
Roy Katz of Channel 10 also inquired about Netanyahu’s concerns regarding the post-Donald Trump era, even with Vice President J.D. Vance potentially succeeding him. While Netanyahu did not directly address Trump’s potential electoral defeat, his response focused on a future without him.
“I can say with certainty that there has never been a president as friendly to Israel as Trump, and there may never be another like him,” Netanyahu stated. “We must prepare for a rainy day. I want independence in weapons production, just as I wanted energy independence.”
Earlier in the same interview, Netanyahu had linked Israel’s markets to Trump, saying, “The markets know that if I win, we will proceed together with President Trump. He said he would work only with me.”
In the event of a Trump loss, Netanyahu identified Indian Prime Minister Narendra Modi as a partner with whom cooperation is already being discussed. “India, a country led by my friend Narendra Modi, is also discussing cooperation with us in production,” Netanyahu said. “I won’t give details; I’d rather implement things first and take credit afterward.”
However, cryptocurrency is not a foolproof escape from sanctions, as blockchains are publicly accessible and traceable. On July 1, Defense Minister Israel Katz signed sanctions orders targeting 37 crypto wallets holding over 24 million shekels, which Israel alleges belong to Iran’s Revolutionary Guards and were intended to fund Hezbollah. The head of the ministry’s counter-terror financing bureau stated, “There is no immunity for terror financiers even in the crypto sphere.”
Tether, the issuer of the dollar-pegged USDT stablecoin, possesses the ability to freeze wallets holding its tokens. In April, the company froze $344 million in conjunction with U.S. authorities, and in July, it froze $131 million in wallets linked to Iran’s central bank and armed forces following U.S. sanctions.
Israel is scheduled to vote on October 27. The current U.S. military aid agreement is set to expire in September 2028, shortly before the next U.S. presidential election.
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