Israeli Prime Minister Benjamin Netanyahu said he has asked for a plan to use cryptocurrency and blockchain networks to help Israel get around possible banking sanctions. He made the comments in an interview on Israel's Channel 10, four days before the country votes in a national election.

Netanyahu indicated he expects U.S. military funding to end. "It only a question of time," he said, telling Israelis to get used to the idea of no longer "receiving tens of billions of dollars in American assistance" for the country's defense budget. The current U.S. aid agreement is worth $3.8 billion a year and expires in September 2028.

"There could be sanctions, including banking sanctions," he continued. "You have to prepare an alternative economy and think about currencies that can get around those restrictions. I am working on that as well."

Asked whether blockchain could serve as a way around sanctions, Netanyahu replied: "Blockchain is one of the alternatives, certainly. I have already asked for a plan to be prepared for that."

He did not elaborate on who is drafting the plan, which currency or network it would use, or when it would be ready. If pursued, Israel would join a small group of states that have already attempted a similar approach, including Venezuela, Iran, Russia and North Korea, all of which have used crypto to move funds outside of American intervention. Those precedents matter for Israel because they show both the playbook and the pitfalls governments have encountered when routing money past restrictions.

Precedents From Venezuela and Russia

Netanyahu's blockchain idea most closely resembles the approach of Venezuelan President Nicolas Maduro, who not only ordered a plan but built an entire legal system around the concept. Venezuela has used Tether and Bitcoin to sustain its oil industry and created the Petro in an effort to push its whole economy outside of SWIFT.

Russia tried a similar route with A7A5, a ruble-pegged token issued by a payments firm co-owned by a sanctioned state bank. The token moved about $102 billion in its first year, according to blockchain analytics firm Elliptic, before sanctions and a hack of its main exchange cut its daily volume by 96% from its peak.

Israel's banking sector has already moved toward digital assets. Bank Leumi, the country's largest bank, plans to offer Bitcoin trading in early 2027 through Galaxy Digital, pending approval from the Bank of Israel. That means Israel's largest bank is preparing regulated crypto access for customers even as its government explores blockchain for a very different purpose.

Sanctions Pressure Mounts

Banking sanctions occur when foreign banks refuse to process payments for a country's banks, making it harder for importers to pay suppliers and eventually pushing up prices at the supermarket.

More than 60 Israeli economists and former officials warned this week that measures now aimed at West Bank settlements could spread to the wider economy and raise the cost of living, per Ynet. The U.K. banned imports from Israeli settlements in early September and announced sanctions on people and companies involved in building them. Eleven other countries, including France and Canada, said they intend to restrict trade in settlement goods.

The pressure follows the war in Gaza. A UN commission of inquiry — an independent panel that does not speak for the UN itself — concluded in September 2025 that Israel was committing genocide there. The International Criminal Court separately issued arrest warrants in November 2024 for Netanyahu and former defense minister Yoav Gallant over alleged war crimes and crimes against humanity in Gaza, which Netanyahu has said Israel will not recognize.

Preparing for a World After Trump

Roy Katz, the Channel 10 broadcaster, also asked whether Netanyahu worries about what happens after Donald Trump leaves office, even if Vice President J.D. Vance succeeds him. Netanyahu did not mention Trump losing power, but his answer was about a world without him.

"I can say with certainty that there has never been a president as friendly to Israel as Trump, and there may never be another like him," Netanyahu said. "We must prepare for a rainy day. I want independence in weapons production, just as I wanted energy independence."

Earlier in the same interview, Netanyahu had tied Israel's markets to Trump. "The markets know that if I win, we will proceed together with President Trump," he said. "He said he would work only with me."

If Trump loses, Netanyahu named India's Prime Minister Narendra Modi as one partner already discussing cooperation. "India, a country led by my friend Narendra Modi, is also discussing cooperation with us in production," Netanyahu said. "I won't give details; I'd rather implement things first and take credit afterward."

Traceability Limits Crypto's Workaround Potential

Crypto is not an easy escape from sanctions, because blockchains are public and traceable — constraints any Israeli plan would have to contend with. On July 1, Defense Minister Israel Katz signed sanctions orders on 37 crypto wallets holding more than 24 million shekels that Israel says belong to Iran's Revolutionary Guards and were meant to fund Hezbollah. The head of the ministry's counter-terror financing bureau said there is "no immunity for terror financiers even in the crypto sphere."

Tether, the company behind the dollar-pegged USDT stablecoin can freeze any wallet holding its token. It froze $344 million in April working with U.S. authorities, and in July it froze $131 million in wallets tied to Iran's central bank and armed forces after U.S. sanctions.

Israelis vote on October 27, and the current U.S. military aid agreement expires in September 2028, just before the next presidential election in the United States. Nearer term, the Bank of Israel's pending approval of Bank Leumi's Bitcoin trading service stands as one of the next concrete checkpoints for how far Israel's financial system opens to digital assets.