Key takeaways
- Benjamin Netanyahu says he has asked for a plan to use blockchain to bypass possible sanctions on Israel.
- The Bank of Israel rejects the idea, saying such assets cannot be used as a route for bypassing sanctions.
- Bitcoin has no issuer or freeze function, but its public ledger leaves every large state transfer auditable.
Israeli Prime Minister Benjamin Netanyahu was rebuked over a plan to use blockchain to bypass economic sanctions after he said Israel should prepare an economy that can bypass possible sanctions, including banking sanctions. Asked in a Channel 10 interview whether he saw blockchain as an alternative to sanctions, Netanyahu answered, in a translation of the Hebrew interview transcript:
"One of them, certainly. I have already asked for a plan to be prepared for that."
Netanyahu did not say who would prepare the plan, which blockchain or currencies it might involve, or when it could be implemented. No budget or framework was mentioned either.
A Quick Rebuke at Home
The Bank of Israel rejected Netanyahu's proposition in a statement, saying such assets "cannot be used as a route for bypassing sanctions." Election candidate Gadi Eisenkot called the idea "BibiCoin" and "a threat to national security" ahead of Israel's elections.
Ben Samocha, founder of CryptoJungle, pointed to the US Treasury's record against Iran:
"As demonstrated by the US Treasury against Iran, blockchain investigation allows tracking illicit funds, blocking their fiat gateway, and even freezing them."
Which Rails a State Could Actually Use
We think the vague word blockchain hides the real choice. Generic blockchain rails have issuers and freeze functions, and stablecoins such as Tether (USDT) and USD Coin (USDC) are claims on assets held inside the sanctioning jurisdiction that can be blacklisted on demand.
Bitcoin alone has no issuer, no headquarters and no freeze function. Its ledger is also public and permanent, so a state moving billions to buy oil cannot hide in mempool noise the way an individual can, and every transfer stays auditable, retroactively too.
Every fiat on-ramp is know-your-customer (KYC) verified, bound by the Travel Rule and exposed to secondary sanctions. Privacy is therefore not guaranteed for large entities like states, while censorship resistance is.
Why It Matters
Netanyahu asked for a plan to bypass banking sanctions without naming a chain, and the Bank of Israel answered that such assets cannot be a route for bypassing sanctions, which holds for any stablecoin whose issuer can blacklist it on demand. We think the lesson for Bitcoiners is that sovereignty comes from settlement nobody can censor, not from a politician rebranding a freezable token or a permissioned ledger as an escape hatch. Bitcoin gives a nation the same deal it gives a saver: no issuer can freeze the coins, but the public ledger and the KYC fiat on-ramps mean every large transfer can be watched. Censorship resistance is guaranteed, privacy is not, and the gatekeepers who control the fiat on-ramps still win if a state forgets the difference.
