Netanyahu orders blockchain plan to prepare for possible banking sanctions

Israeli Prime Minister Benjamin Netanyahu wants Israel to be ready if international banking sanctions disrupt its ability to move money abroad. He has asked for a contingency plan that includes blockchain. However, the plan poses a real challenge for banks around the world and issuers of stablecoins: even if one can send money via blockchain, the question remains: how should businesses turn it into usable funds?

Netanyahu discussed the possibility during an interview with Roy Katz on Israel’s Channel 10 on Friday, October 23, 2026.

What Netanyahu actually said on Channel 10

Netanyahu expressed concern over the economic restrictions placed on Israel, especially those in the banking sector, and pushed for effective measures to be put in place to deal with them. When asked whether the use of blockchain was an option, he said: “One of them. Certainly,” and that he had requested for a plan.

As noted by The Block, no agency responsible for implementation has been named, nor have details about a currency or a timetable been provided. Netanyahu insisted during the same interview that military assistance from the US does not mean it will be there for an unlimited time period. He also justified the anticipated introduction of a large budget increase for the defense sphere – 400 billion shekels (approximately 129 billion dollars) over the coming years.

The UK sanctions on the table are narrow, not a bank cutoff

Today’s constraints are considerably more limited. A briefing by the UK House of Commons Library in September 2026 presented proposals to further broaden restrictions on settlement activities and impose limitations on trade related to settlements and certain weapons transfers. With the imposition of sanctions on those implicated in settler violence, the total number of restrictions reached 38. None of which involve cutting off Israeli banks.

The Jewish People Policy Institute recorded 139 sanctions, restrictions and diplomatic measures against Israel across 64 countries and entities as of October 18, 2026. The US accounted for 15, the highest number for any country. However, as The Jerusalem Post noted, these included proposed congressional restrictions and academic boycotts, not just enacted government sanctions.

The provided numbers demonstrate the extent of the measures taken against Israel, but they cannot be classified as a complete cutoff of its banking system. The International Monetary Fund (IMF), in July 2026, described the banking sector in the country as well-capitalized and liquid, but urged for stricter measures in the fight against money laundering and financing of terrorism.

Moving a token is not the same as reaching usable liquidity

While blockchain technology is capable of transferring tokens without intermediary banks, Israeli companies that want to pay their suppliers will likely encounter a more difficult challenge: converting those tokens into cash usable by their business partners. Banks and exchanges that facilitate these conversions are still obliged to comply with the applicable sanctions.

Nir Hirschman, CEO of Israel’s Crypto Companies Forum, acknowledged this limitation in an X post:

Crypto has the potential to connect Israel to the global financial markets, but it is not a haven or shelter for money transfers.

Whether that potential can support Israel’s international trade is another question. The BIS estimated $28 trillion in overall stablecoin transactions in 2025, but only about $390 billion in payment-related flows. Much of the activity remained tied to crypto trading. An IMF analysis also identified conversion costs and risks from cross-border capital flows.

If sanctions push more businesses toward dollar stablecoins, global demand could rise. However, greater demand would not guarantee access to the banks and exchanges needed to keep international trade moving.

What Russia’s A7 shows, and does not

Russia’s A7 network offers a cautionary comparison. Cryptopolitan reported on September 23, 2026 that leaked files showed over $6.9 billion moved through global banks using forged documents. TRM Labs traced more than $166 billion in related on-chain activity. These totals track different things and cannot be combined; some blockchain activity was circular.

After sanctions and exchange disruptions, A7A5’s average daily transaction volume sank 96% between its July 2025 peak and June 2026, Elliptic found.

The comparison has limits: Israel has announced no working alternative, and its digital shekel remained under study in May 2026. The real test would be whether trading partners can legally receive and convert the tokens.