Israeli Prime Minister Benjamin Netanyahu has ordered a contingency plan built around blockchain technology to prepare for the possibility that international banking sanctions disrupt Israel's ability to move money abroad. The directive highlights a practical dilemma for banks worldwide and stablecoin issuers alike: even if funds can be sent over a blockchain, businesses would still need a way to convert them into usable money — and the banks and exchanges that handle those conversions are themselves subject to sanctions compliance obligations.

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

What Netanyahu said on Channel 10

Netanyahu voiced concern over the economic restrictions imposed on Israel, particularly in the banking sector, and called for effective measures to address them. Asked whether blockchain was an option, he replied: “One of them. Certainly,” adding that he had requested a plan.

As noted by The Block, no agency has been named to implement the plan, and no details about a currency or a timetable have been provided. Those three open items — the implementing agency, the currency and the timetable — are the details that would show whether the contingency takes concrete form.

During the same interview, Netanyahu stressed that US military assistance does not mean American support will continue indefinitely. He also defended a planned defense budget increase of 400 billion shekels (approximately $129 billion) over the coming years.

Current sanctions are narrow, not a banking cutoff

Existing measures remain far more limited than a full banking exclusion. A September 2026 briefing by the UK House of Commons Library outlined proposals to broaden restrictions on settlement activities and limit trade tied to settlements and certain weapons transfers. With sanctions imposed on individuals implicated in settler violence, the total number of UK restrictions reached 38 — none of which involve cutting off Israeli banks.

According to the Jewish People Policy Institute, 139 sanctions, restrictions and diplomatic measures had been recorded against Israel across 64 countries and entities as of October 18, 2026. The United States accounted for 15, the highest number for any country. However, as The Jerusalem Post noted, that figure included proposed congressional restrictions and academic boycotts, not only enacted government sanctions.

The numbers illustrate the breadth of measures taken against Israel but do not amount to a complete cutoff of its banking system. That gap between today's narrow measures and the scenario Netanyahu described — banks unable to move money across borders — is the context for the directive. In July 2026, the International Monetary Fund (IMF) described the country's banking sector as well-capitalized and liquid, while urging stricter measures against money laundering and terrorism financing.

Moving a token is not the same as reaching usable liquidity

Although blockchain can transfer tokens without intermediary banks, Israeli companies seeking to pay suppliers would face a harder problem: converting those tokens into cash that their business partners can use. Banks and exchanges that facilitate such conversions remain obliged to with 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 Bank for International Settlements (BIS) estimated $28 trillion in overall stablecoin transactions in 2025, but only about $390 billion in payment-related flows, with much of the activity tied to crypto trading. The distance between those two figures is the backdrop against which any sanctions-driven shift toward stablecoins would unfold. An IMF analysis also identified conversion costs and risks arising from cross-border capital flows.

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

What Russia's A7 network shows — and does not

Russia's A7 network offers a cautionary comparison. Cryptopolitan reported on September 23, 2026, that leaked files showed more than $6.9 billion moved through global banks using forged documents, while TRM Labs traced more than $166 billion in related on-chain activity. The two totals track different things and cannot be combined; some of the 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 its limits: Israel has announced no working alternative, and its digital shekel remained under study as of May 2026, according to a Bank of Israel progress report. The real test would be whether trading partners can legally receive and convert the tokens.