Economists Warn Netanyahu's Crypto Plan Will Devastate Israel's Economy

By Вести-Ynet

Translated & summarized from Vesty by baba

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Over 100 Israeli economists and former officials warned Prime Minister Benjamin Netanyahu that his plan to use cryptocurrencies to bypass potential sanctions would devastate the economy. They stated sanctions would cause irreversible damage, cripple key sectors, and lead to a sharp drop in living standards. The Bank of Israel also rejected the cryptocurrency proposal. Netanyahu, however, indicated he would proceed with his plans, calling cryptocurrencies "one of the tools."

The story in 6 lines · by baba

Over 100 Israeli economists warned PM Netanyahu that his crypto plan would devastate the economy.
Sanctions would cause irreversible damage, cripple sectors, and lower living standards, economists said.
The Bank of Israel also rejected the cryptocurrency proposal as a way to bypass sanctions.
Economists accused Netanyahu of leading Israel toward boycott and isolation with his plan.
Netanyahu stated he would do what he thinks is necessary regarding cryptocurrencies.
Nobel laureates and former finance ministry heads signed the critical open letter.

Economists Warn Netanyahu's Crypto Plan Will Devastate Israel's Economy — Editorial illustration generated by baba News, not a photograph of the event.

Over 100 prominent Israeli economists, business leaders, and former senior civil servants have penned an open letter strongly opposing Prime Minister Benjamin Netanyahu's proposal to use cryptocurrencies to circumvent potential international sanctions.

Published on October 25, the letter warns that such sanctions would inflict "enormous and irreversible damage" on Israel, and that cryptocurrencies would be an inadequate solution. Signatories include Nobel laureate in Economics Professor Yoel Mokyr, former Bank of Israel Governor Professor Yakov Frenkel, and Nobel laureate in Chemistry Professor Aaron Ciechanover. Four former Directors-General of the Ministry of Finance also signed: Yarom Ariav, Professor Avi Ben-Bassat, David Brodet, and Haim Shani.

The economists argue that sanctions would cripple the Israeli banking system, companies, exporters, investors, and particularly the high-tech sector, which drives economic growth. They predict a sharp rise in unemployment, a complete halt to foreign investment, and a collapse of Israel's global economic standing. The letter details severe impacts on daily life, including the inability to use credit cards, access international e-commerce sites like Amazon and AliExpress, and difficulties for foreign workers sending money home. The healthcare system would struggle to procure medical equipment and drugs, leading to the conclusion that sanctions would "completely destroy the model that ensures Israel's existence as a modern and developed economy."

Referencing South Africa, Iran, and Russia, the signatories state that Israel would experience a "sharp drop in the standard of living" and a severely undermined ability to fund defense. They directly accuse Netanyahu of "consciously leading the State of Israel towards an international boycott and economic isolation," criticizing his proposed cryptocurrency solution as "dubious" and "completely useless," and indicative of "a lack of basic understanding and ignorance."

The Bank of Israel also criticized the plan, stating that cryptocurrencies cannot bypass sanctions and that Israel should focus on maintaining economic ties and preventing sanctions. Despite the widespread criticism, Netanyahu has not abandoned his position. In a recent interview, he acknowledged the advice but stated he would "do what I think is necessary," adding that cryptocurrencies are "one of the tools, and not the only one."