Prime Minister Benjamin Netanyahu, who faces re-election this week, is drawing criticism from economists and political rivals after suggesting Israel could use cryptocurrency to help shield its economy from potential international sanctions, Reuters reported from Jerusalem on Sunday.

Source: Reuters, Oct 25

In an interview with Israel's Channel 10 on Friday, Netanyahu said he was preparing for a scenario in which broader sanctions were imposed on Israel, Reuters said. Last month, Britain, France and Canada said they would block imports from Israeli settlements in the West Bank, underscoring Israel's growing diplomatic isolation among some traditional allies, according to Reuters.

Source: Reuters, Oct 25

"There could be sanctions, and sanctions on banks so you need to set up a bypass economy," Netanyahu said, according to Reuters. "You know, there are currencies that can bypass (sanctions). We are also working on that." Asked whether he was referring to cryptocurrency, he replied: "Very true, very true," adding that blockchain technology was another possibility, Reuters reported.

Source: Reuters, Oct 25

Rare central bank rebuke

The comments drew a rare rebuke by the Bank of Israel, which said cryptocurrencies cannot serve as a route to bypass sanctions and that political leaders should focus on policy that would render such measures unnecessary, Reuters reported. "The right course for Israel's economy is to preserve our economic relations with our main trading partners, and to focus on preventing sanctions and their negative impact on the economy," the bank said.

Source: Reuters, Oct 25

The Times of Israel likewise reported the central bank's October 24 statement that cryptocurrencies "cannot be used as a route for bypassing sanctions," and reported that Netanyahu later said crypto was only one possible tool and might never be used, with no blockchain, token or implementation timetable announced.

Source: Times of Israel, Oct 24, via CoinScreamer

Economists and rivals warn of isolation

On Sunday, more than 100 economists, including former Bank of Israel officials, ex-central bank governor Jacob Frenkel and several Nobel laureates, signed a letter expressing alarm over the proposal, Reuters reported. They said it would lead to higher unemployment, a fall in foreign investment and the collapse of Israel's economic standing, and warned living standards would plummet as in sanctioned South Africa, Iran and Russia.

Source: Reuters, Oct 25

Netanyahu's main rival in Tuesday's election, Gadi Eisenkot, called the crypto plan "madness" and said he feared the "BibiCoin policy" would drive companies abroad, Reuters reported. Opposition leader Yair Lapid also criticised the idea. Opinion polls point to a potential stalemate, with neither Netanyahu's coalition nor an opposition alliance securing a governing majority, according to Reuters.

Source: Reuters, Oct 25

Netanyahu on Sunday continued to defend his record, urging voters to back him and saying he and US President Donald Trump had two years left to work together to topple Iran's rulers, Reuters reported.

Source: Reuters, Oct 25