Netanyahu says Israel has asked for a blockchain plan to parry possible sanctions

Israeli Prime Minister Benjamin Netanyahu said on October 23, 2026, in an interview on Israel's Channel 10 with broadcaster Roy Katz, that he has asked for a plan built on blockchain and crypto networks to work around possible banking sanctions. The remarks landed four days before Israel's October 27 election, and were reported by Decrypt and by The Block from the Hebrew transcript.

What Netanyahu said

• "There could be sanctions, including banking sanctions."
• "You have to prepare an alternative economy and think about currencies that can get around those restrictions."
• "Blockchain is one of the alternatives, certainly."
• "I have already asked for a plan to be prepared for that."
• "We must prepare for a rainy day."

Netanyahu did not name the ministry drafting the plan, the chain, the currency, or any timeline. He also said U.S. military aid will eventually end — "It is only a question of time" — and that the markets know that if he wins the election, "we will proceed together with President Trump." He told viewers he had allocated an additional 400 billion shekels (about $129 billion) to the defense budget "over the coming years."

Why Israel is thinking about this now

The specific sanctions regime Netanyahu is responding to is the one the United Kingdom announced on September 8, 2026: measures targeting Israeli settlement activity in the West Bank, to be implemented within 6 to 9 months, joined by eleven other countries including France, Canada, Spain, Finland, Ireland and Portugal. The regime foresees an embargo on settlement-origin goods and sanctions on entities providing them with construction, infrastructure or financing services. Israeli media have raised the prospect of a broader cut-off from the correspondent-banking rails.

Netanyahu's reference frame for a crypto workaround is explicit in the Hebrew transcript: he mentions "currencies that bypass" sanctions without naming any.

Precedents the plan would draw on

Netanyahu did not point to specific precedents, but the two obvious ones are on the record:

1. Russia — rouble-pegged stablecoin. The A7A5 rouble stablecoin, launched from Kyrgyzstan in January 2025 and backed by deposits at Promsvyazbank, moved about $102 billion in its first year on-chain, according to Elliptic. Most of the secondary volume routes through Grinex, the venue that succeeded sanctioned exchange Garantex.
2. Iran — USDT rails. A September 2026 report from Senator Richard Blumenthal's staff on the Senate Permanent Subcommittee on Investigations found that 84% of 846 sanctioned Iran-linked wallets operated almost exclusively in USDT, which we covered when the report dropped (see our September 28 write-up).

Israel is already running the opposite side of the same mechanism. On July 1, 2026, Defense Minister Israel Katz signed a sanctions order against 37 crypto wallets holding more than 24 million shekels, allegedly linked to Iran's Revolutionary Guards and Hezbollah. Tether froze $344 million in April and $131 million in July 2026 tied to Iran, and the U.S. recently sanctioned the Iranian venue BitBank over bitcoin flows to the Revolutionary Guards in June–July 2026.

Infrastructure that would carry it

Netanyahu did not say which rails. The ones in reach from inside Israel today:

• Bank Leumi plans to start Bitcoin trading in early 2027 via Galaxy Digital, pending Bank of Israel approval.
• Israel's banking sector itself is not yet connected to a stablecoin issuance stack, so any plan either imports a dollar-pegged rail (USDT, USDC) or stands up something domestic.
• The Bank of Israel has run digital-shekel pilots but has not committed to a retail CBDC.

What to watch

1. Whether the Ministry of Finance or the Prime Minister's Office publishes concrete terms of reference before the Oct 27 vote, or treats this as campaign framing.
2. Which chain the plan names, if any — the asymmetry between a sovereign bitcoin reserve, a shekel-pegged stablecoin, and routing on an existing dollar stablecoin matters for sanctions reach.
3. Whether U.S. Treasury signals any posture change in response.
4. The composition of post-election sanctions diplomacy with the 12-country UK-led bloc.

Context

The pattern this post fits is a widening one: three sanctioned or sanctions-exposed states — Russia, Iran, now Israel — publicly treating a stablecoin or blockchain rail as a hedge against banking restrictions, while the same rails are being used by the sanctioning side to freeze wallets. The policy argument on crypto sanctions resistance tends to assume one axis of flow. The data increasingly shows two.