Netanyahu's Shift: From Economic Growth to Sanctions Workarounds

Israeli Prime Minister Benjamin Netanyahu is preparing the nation for potential sanctions by exploring ways to circumvent them, rather than focusing on prevention, according to journalist Liat Ron writing for Walla. Netanyahu, who previously highlighted Israel's economic achievements, is now discussing strategies involving blockchain and digital currencies to navigate possible economic and banking restrictions.

In an interview with Roi Katz on the "Economy" channel, Netanyahu expressed concern about sanctions and revealed he has tasked officials with developing a plan for an "economy around sanctions." He confirmed that blockchain could serve as an alternative, a move Ron finds surprising given his economic background. Ron argues that while preparing for worst-case scenarios is responsible, presenting sanctions circumvention as an economic solution is fundamentally different from preventing them. She emphasizes the need to restore international relations and trade ties.

This is not the first time Netanyahu has discussed economic isolation. In September 2025, he spoke of Israel adapting to an economy less reliant on the outside world, using the terms "Athens and super-Sparta" and "autarky," which he dislikes. He later clarified this referred to defense industry self-sufficiency, not a closed economy.

Ron points out that blockchain technology, while useful for digital transactions, cannot replace the global banking system or international trade, nor can it nullify sanctions. She provides an example of an Israeli company unable to purchase equipment from a German factory due to sanctions, noting that even Bitcoin payments wouldn't override the sales ban. The U.S. Treasury Department also clarifies that sanctions apply to digital currency transactions.

Beyond payment issues, sanctions can severely impact imports, exports, foreign investment, and market access, affecting jobs, wages, and prices. Ron stresses that Netanyahu understands these risks, particularly the high-tech sector's reliance on foreign investors and exporters' dependence on overseas buyers. She criticizes the focus on workaround plans without a strategy to prevent sanctions in the first place, especially as over 60 economists have warned of the economic damage from expanding sanctions.

Ron contrasts Netanyahu's current stance with his 2003 approach as Finance Minister, when he pursued market liberalization. She notes that unlike resource-rich Russia or Iran, which has long endured sanctions, Israel, a small nation dependent on international trade and investment, cannot afford to isolate itself. She concludes that Netanyahu's priority should be ensuring Israel remains integrated globally, not finding ways to operate outside it, particularly as Israelis face a high cost of living and business challenges.