Netanyahu Considers Crypto to Evade Sanctions, Sparking Economic Fears
Translated & summarized from Haaretz by baba
Prime Minister Benjamin Netanyahu proposed Israel prepare for potential banking sanctions by using cryptocurrency, a move criticized as dangerous and reminiscent of pariah states. The suggestion comes amid threats of sanctions from Britain and 12 other nations targeting Israeli settlements and associated businesses, including banks. Economists warn this could cripple Israel's trade-dependent economy and deter foreign investment, urging a return to responsible policy instead of crypto adoption.
The story in 5 lines · by baba
- Prime Minister Netanyahu proposed Israel use cryptocurrency to bypass potential global banking sanctions.
- Critics warn this strategy is dangerous and could cripple Israel's trade-dependent economy.
- Britain and 12 other nations plan sanctions targeting Israeli settlements and businesses, including banks.
- The Bank of Israel and banking sector are reportedly alarmed by the threat of disconnection.
- Finance Minister Bezalel Smotrich previously called settlement construction the 'final end of the two-state solution'.
Prime Minister Benjamin Netanyahu has suggested that Israel should prepare for potential disconnection from the global banking system by utilizing cryptocurrency, a strategy currently employed by nations like Iran and North Korea. Speaking in an interview on Friday, Netanyahu stated he had requested a plan to circumvent sanctions using digital currencies, warning that US aid might not continue indefinitely and that banking sanctions are a possibility.
This proposal has raised significant alarm among Israeli economists and the banking sector. They argue that severing ties with the global banking system would be catastrophic for Israel's economy, which relies heavily on foreign trade and investment, particularly through its high-tech industry. The concern is that no serious investor would use crypto accounts, crippling the economy's growth engine and foreign trade.
The context for these concerns includes recent announcements from Britain and 12 other European nations, including France, Canada, Denmark, Spain, Finland, Ireland, Poland, Portugal, and Sweden, of their intention to impose sanctions on Israeli companies. These sanctions are reportedly aimed at entities involved in settlements, including banks and construction firms operating in the West Bank, following the UK Foreign Secretary Ed Miliband's declaration of import bans on goods from illegal settlements. Finance Minister Bezalel Smotrich had previously described construction in the E1 area near Ma'ale Adumim as the "final end of the two-state solution."
Bank of Israel and the banking system are reportedly very concerned about these potential sanctions, which could lead to Israeli banks being disconnected from European banks and potentially trigger a wider global reaction. Netanyahu's suggestion to prepare for sanctions via crypto is seen by critics as an admission of the severity of the international crisis and the government's inability to prevent sanctions, rather than a viable solution. Experts warn that such a scenario could lead to a collapse in Israel's credit rating and foreign investment, and that crypto is a tool used by pariah states. The article suggests Netanyahu may be exaggerating the threat to create a sense of urgency, but argues his proposed solution is dangerous and irresponsible, advocating instead for a return to sanity and a plan to stop the economic bleeding.
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