Overview
- Prime Minister Benjamin Netanyahu said in an Oct. 23 television interview that he has asked advisers to prepare a plan to use blockchain and digital currencies as an alternative economy in case Israel faces banking sanctions.
- He gave no details about who will write the plan, which blockchain or tokens would be used, or any timetable for implementation.
- Israel already has some building blocks that could be relevant, including the April 2026 approval of BILS, a shekel-backed stablecoin, earlier work on a digital-shekel design, and an October update to Bank of Israel rules easing bank handling of virtual-asset funds.
- U.S. and international sanctions rules treat digital assets like traditional money and past state efforts to use crypto have been blocked by freezes, designations, exchange shutdowns and issuer controls, so a crypto route would face clear legal and operational limits.
- The proposal drew sharp domestic criticism and a public rebuttal from the Bank of Israel, and it has raised market and diplomatic concerns ahead of Israel’s Oct. 27 election.