109 Israeli economists warn against Netanyahu's idea of using crypto to beat sanctions

More than a hundred of Israel’s best-known economists and former officials have warned Prime Minister Benjamin Netanyahu against his suggestion that the country prepare to use cryptocurrencies to get round possible international sanctions on its banks.

In a statement issued through the Economists’ Forum on Sunday, 109 senior economists, business leaders and former officials said they had “grave concern and anxiety” about the idea and called it “puzzling”. They warned it could cause “irreversible damage”.

The signatories include former Bank of Israel governor Jacob Frenkel, former deputy governors Zvika Eckstein and Avia Spivak, and Manuel Trajtenberg, who once headed the National Economic Council.

What sanctions would mean

The group said sanctions on the banking system would leave companies, exporters, investors and the technology sector unable to operate. “Unemployment will surge, foreign investments will vanish entirely,” the statement said. Israelis would lose access to credit cards and online shopping from abroad, and hospitals would struggle to buy medical equipment and medicines, it added. It pointed to South Africa, Iran and Russia as countries where sanctions had brought lower living standards.

The forum’s warning follows a rare public rebuff from the Bank of Israel, which said on Saturday that cryptocurrencies “cannot be used as a route for bypassing sanctions”.

The row lands two days before Tuesday’s general election, in which Netanyahu faces a challenge from a field of opposition parties.