109 Economists Warn Netanyahu's Crypto Sanctions Plan Will Cripple Israel

One hundred and nine economists, tech founders and former officials have signed a letter accusing Prime Minister Benjamin Netanyahu of proposing a "bizarre solution commonly used by criminal organizations that will be of no help whatsoever." The target is Netanyahu's request for a plan to circumvent potential banking sanctions using cryptocurrencies and blockchain technology.

The letter, which expresses "deep anxiety and concern," warns of irreversible damage to Israel's economy if international sanctions are imposed. The signatories charge that the prime minister's remarks demonstrate "a fundamental lack of understanding and ignorance in the face of Israel's collapsing standing in the international arena." Their sharpest line: "Netanyahu is knowingly leading the State of Israel toward an international economic boycott and isolation."

What triggered the economists' letter?

The statement followed an interview in which Netanyahu said he was not concerned about sanctions and declared that US military aid "is not something that will last forever and will eventually end." He then revealed he had asked for a plan to route around banking sanctions with crypto and blockchain tools.

The Bank of Israel pushed back over the weekend. The central bank stated plainly that "cryptocurrencies cannot serve as a means of circumventing sanctions on Israel." It added that "the right thing for Israel's economy is to preserve our economic relations with our main trading partners and focus on preventing sanctions."

Netanyahu dismissed the central bank in an interview with Channel 14: "I thank the Bank of Israel for its advice, but I do what I think is right."

Who signed the protest?

The list carries unusual weight. It includes two Nobel Prize laureates: Prof. Joel Mokyr in Economics and Prof. Aaron Ciechanover in Chemistry.

Other signatories:

• Israel Prize laureate and former Bank of Israel governor Prof. Jacob Frenkel
• Former deputy governors Prof. Zvi Eckstein and Dr. Nadine Baudot-Trajtenberg
• Former supervisors of banks Yair Avidan and Rony Hizkiyahu
• Former Finance Ministry directors-general Yarom Ariav, Prof. Avi Ben-Bassat, David Brodet, Haim Shani, and Prof. Manuel Trajtenberg, who also chaired the National Economic Council
• Former chief economist Shira Greenberg and former budget director Udi Nisan

The business and tech contingent includes CyberArk founder Alon Cohen, Check Point co-founder Marius Nacht, G City founder Chaim Katzman, BIG Shopping Centers CEO Hai Galis and chairman Eitan Bar Zeev, entrepreneur Gigi Levy-Weiss, and Fireblocks co-founders Idan Ofrat, Dov Moran, and Roy Vermus.

What do the economists say happens under sanctions?

The mechanism they describe is blunt. Restrictions on Israel's banking system would trigger soaring unemployment, the complete disappearance of foreign investment, and paralysis of the high-tech sector — the economy's primary growth engine.

Daily life would suffer too. The letter lists:

• Inability to use credit cards
• Loss of access to Amazon and AliExpress
• Departure of foreign workers
• Serious difficulties for the healthcare system in buying medicines and medical equipment

The signatories compare the scenario to South Africa, Iran, and Russia under severe sanctions. They project a dramatic decline in living standards and devastating damage to Israel's ability to finance its defense needs.

How did the business sector react?

Galit Miran, CEO of the Israel-America Chamber of Commerce, warned against "adopting financial models characteristic of isolated and excluded countries." Such mechanisms, she said, could undermine investor confidence and Israel's credit rating.

The Manufacturers Association of Israel said the economy is built on free trade and the free movement of capital. Maintaining those conditions, it argued, is the only way to ensure economic resilience.

Why does this matter for Tuesday's election?

The controversy landed in the middle of the campaign, which culminates on Tuesday. Yashar party chairman Gadi Eisenkot issued his own warning: "If Netanyahu continues, there will be no savings, no international investments, and you will not be able to pay by credit card online or abroad. For Netanyahu, the conversation has shifted from prosperity to survival. After another term under him, we will long for the days of austerity."

Opposition leader Yair Lapid said Netanyahu's own words amounted to an admission that military aid would end and sanctions would follow, bringing "insane price increases and irreparable damage."

B'Yachad chairman Naftali Bennett called the vision appalling. "This means the destruction of Israeli high-tech, the loss of livelihoods for hundreds of thousands of families, poverty for millions of Israelis, and a threat to security. Netanyahu is placing Israel in the same category as Iran, North Korea, and Russia."

The vote on Tuesday will test whether voters treat the sanctions question as a technical debate about crypto rails or as the central economic risk of the next government.