Israel’s central bank and leading figures from the country’s economic community publicly opposed Prime Minister Benjamin Netanyahu’s proposal to use blockchain as a response to possible banking sanctions.
On Oct. 24, the Bank of Israel issued a statement saying cryptocurrencies "cannot serve as a means of evading sanctions." One day later, 109 economists, business executives and former government officials published an open letter warning that the idea could cause "irreversible damage."
Central bank says Israel should preserve trade ties
Chain News reported on Oct. 24 that Netanyahu said in an interview on Oct. 23 that Israel could face banking sanctions and that he had asked for a blockchain-based response plan to be developed.
According to Israeli news site Ynet, the central bank’s statement said: "The correct course for the Israeli economy is to maintain economic relations with its main trading partners." The statement also said the matter falls under the responsibility of the political leadership and that the government should act to advance that goal. Ynet described the wording of the response as unusually direct.
The same report said officials in economic ministries were unaware of such a plan, while senior figures in the prime minister’s office also said they did not know of any team working on it.
109 signatories oppose the proposal
According to The Times of Israel, the open letter was issued on Oct. 25 by the Economists’ Democratic Forum. It called Netanyahu’s proposal "bewildering" and warned: "Unemployment will soar, foreign investment will disappear entirely, and Israel’s global economic standing will collapse."
Those who signed the letter included former Bank of Israel Governor Jacob Frenkel, former deputy governors Zvika Eckstein and Avia Spivak, former banking supervisor Yair Avidan, and several former directors-general of the Finance Ministry.
Avidan also told Ynet: "Blockchain is not a solution for evading sanctions."
Netanyahu says he will listen, but decide for himself
Responding to the criticism, Netanyahu said in an interview with Israel’s Channel 14: "I have heard the opposing views, and I will take them into account." He then added: "I will listen, but I will do what I think is right."
Israel’s parliamentary election is scheduled for Oct. 27. Netanyahu has not released the contents or timeline of the blockchain proposal, and the Bank of Israel has not announced any new cryptocurrency policy.
