Benjamin Netanyahu, the Prime Minister of Israel, is facing widespread criticism from economists and political rivals ahead of the upcoming elections. In an interview with one of Israel's television networks, he announced that the country may use cryptocurrencies to protect its economy against international sanctions.
Forecasting Widespread Sanctions
In this interview, Netanyahu referred to scenarios where additional sanctions may be imposed on Israel. He said: "There may be sanctions that affect banks, so we need to create a circumvention economy." He also mentioned the possibility of using blockchain technology.
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Reactions from the Central Bank and Economists
Netanyahu's comments were met with a strong reaction from the Central Bank of Israel. This institution stated that cryptocurrencies cannot serve as a means to circumvent sanctions and that policymakers should focus on actions that make these sanctions unnecessary. The Central Bank added: "The right path for Israel's economy is to maintain economic relations with its main trading partners and to prevent sanctions and their negative impacts on the economy."
More than 100 economists, including former Central Bank officials and Nobel Prize winners, expressed concern in a letter regarding Netanyahu's proposal. They warned that this plan could lead to increased unemployment, reduced foreign investment, and weaken Israel's economic standing in the world. This group emphasized that the lives of Israeli citizens would be severely affected and the government's ability to ensure security and defend itself would be diminished.
Netanyahu's main rival in the elections, Gadi Eisenkot, called the plan "madness" and expressed concern about the potential exit of companies from the country and the weakening of national security. Yair Lapid, the opposition leader, also stated: "Netanyahu has strayed from the main path and promises that Israeli citizens will have to stand in long lines for bread, similar to conditions seen in Russia and Iran." Polls indicate that none of the political coalitions in the upcoming elections are likely to gain a governing majority.
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