Israel Considers Digital Currencies to Counter Sanctions

By סוכנויות הידיעות

Translated & summarized from Ynet by baba

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Hebrew · 6 newsrooms covering

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Prime Minister Benjamin Netanyahu proposed Israel explore digital currencies to counter potential banking sanctions, citing their use by isolated nations. In 2025, sanctioned countries received over $104 billion in crypto, with Russia leading via its ruble-backed stablecoin A7A5. Iran, North Korea, and Venezuela also utilize crypto for sanctions evasion, through mechanisms like financing proxies, hacking, and oil sales. Stablecoins, though dominant in illicit transactions, face increasing scrutiny and asset freezes.

The story in 6 lines · by baba

Prime Minister Netanyahu suggested Israel prepare for banking sanctions using digital currencies.
Sanctioned nations received over $104 billion in crypto in 2025, an eightfold increase.
Russia leads with its ruble-backed stablecoin A7A5, facilitating over $93.3 billion in transactions.
Iran uses crypto for financing proxies and oil trade, while North Korea relies on hacking.
Venezuela shifts oil sales to stablecoins to avoid frozen revenue accounts.
Stablecoins, though dominant in illicit transactions, are increasingly targeted by authorities.

Israel Considers Digital Currencies to Counter Sanctions — Editorial illustration generated by baba News, not a photograph of the event.

Prime Minister Benjamin Netanyahu suggested on Friday that Israel should prepare for potential banking sanctions by utilizing digital currencies. This proposal highlights how cryptocurrencies have become a primary financial channel for isolated nations over the past year. A 2026 report by blockchain analytics firm Chainalysis indicates that entities under sanctions received at least $104 billion in cryptocurrency in 2025, an almost eightfold increase from 2024, pushing total illicit blockchain activity to a record $154 billion.

Nations facing severe sanctions, including Russia, Iran, North Korea, and Venezuela, are integrating crypto into their national financial strategies to bypass the traditional banking system. Russia leads this trend, having launched a ruble-backed stablecoin called A7A5 in February 2025. This stablecoin facilitated over $93.3 billion in transactions within its first year, despite U.S. and UK sanctions on companies allegedly behind it. TRM Labs estimated that $72 billion, half of all illicit crypto flows, was linked to A7A5. The U.S. and its allies have also targeted Russian crypto exchange Garantex, though a successor, Grinex, has emerged. Oleg Ogyenko, Director of Regulation at the company issuing A7A5, stated their service primarily supports Russian export and import payments and called the findings politically motivated.

Iran is another significant player, with entities linked to the Revolutionary Guard Corps accounting for over 50% of the value received by Iranian crypto services by late 2025. These funds, totaling over $3 billion, were used for financing regional proxies, oil trade, and procurement networks. Reuters reported Iran's crypto transaction volume reached $8-10 billion last year, with both state-linked entities and private investors turning to digital assets due to sanctions and currency devaluation.

North Korea employs a different strategy: theft. Hackers linked to the Pyongyang regime stole over $2 billion in cryptocurrency in 2025, including a record-breaking $1.5 billion from the Bybit exchange hack in February. Venezuela is using crypto within its oil industry, with state-owned PDVSA gradually shifting oil sales to the USDT stablecoin to avoid frozen revenue accounts, especially after the U.S. reimposed oil sanctions.

Stablecoins, pegged to the dollar, account for approximately 84% of illicit crypto transactions. While Tether has pledged to freeze addresses linked to sanctioned entities following revelations about Venezuela, Russia's creation of its own stablecoin demonstrates a move to circumvent such controls.