Economists Warn Netanyahu's Crypto Plan Risks International Isolation

Over 100 former senior officials from the Bank of Israel and the Treasury, along with prominent figures from business and academia, have penned a sharp letter criticizing Prime Minister Benjamin Netanyahu's proposal to use cryptocurrencies to circumvent potential international sanctions. The signatories, including Nobel laureates Professor Yoel Mokyr and Professor Aaron Ciechanover, expressed "deep anxiety and concern" over Netanyahu's plan, warning it could lead to irreversible damage to Israel's economy.

The letter, issued by the Forum of Economists, highlights the severe consequences of sanctions, stating that Israelis could be blocked from using credit cards, international e-commerce sites like Amazon and AliExpress might be inaccessible, and foreign workers could leave en masse due to difficulties in transferring funds. They also warned that the healthcare system could struggle to procure medical equipment and medications, ultimately destroying the model of Israel as a modern, advanced economy.

Netanyahu had previously instructed that a plan be prepared to utilize alternative payment methods, including cryptocurrencies, to counter possible restrictions on the Israeli financial system. This initiative comes as Britain and several European countries are advancing sanctions against Israel, citing settler violence in the West Bank and settlement expansion in the Ma'ale Adumim area.

The economists argue that Netanyahu is "consciously leading the State of Israel towards international economic boycott and isolation" and that his proposed solution is "a bizarre solution accepted in criminal organizations" that will be ineffective. They believe his statements demonstrate a fundamental lack of understanding and ignorance regarding Israel's declining international standing.

The Bank of Israel has also weighed in, stating that "cryptocurrencies cannot serve as a bypass route for sanctions." The central bank emphasized the importance of maintaining economic relations with key trading partners and focusing on preventing sanctions rather than circumventing them. In a subsequent interview, Netanyahu appeared to soften his stance, suggesting crypto was just one of several potential tools and not necessarily the sole or guaranteed method to be used, while asserting he listens to advice but ultimately acts on his own judgment.