Prime Minister Benjamin Netanyahu’s request for a sanctions contingency plan has drawn a warning from the Bank of Israel that cryptocurrency cannot provide a workaround, days before Israel’s election.
In its Oct. 24 statement, the central bank said Israel should make preserving economic relationships with principal trading partners a priority, alongside efforts to prevent sanctions and limit their effects.
Prime Minister Benjamin Netanyahu had raised the contingency request before the bank spoke. In an interview published Oct. 23, he said he had requested a plan for keeping the economy functioning if sanctions disrupted banks, with blockchain among the possibilities he raised. The request remains a proposal; no timetable or operating details have been made public.
An Oct. 25 letter signed by more than 100 people, including economists, businesspeople and former public officials, warned that restrictions on banks could increase unemployment and discourage foreign investment. The signers said workers, businesses and investors would bear the costs if broad sanctions were imposed, and argued cryptocurrency could not make up for those losses. Jacob Frenkel, a former governor of the Bank of Israel, signed the letter, as did two Nobel laureates. The letter also cited South Africa, Iran and Russia as comparisons.
Voting is set for Tuesday, Oct. 27.
