# Former Israeli Banking Supervisor Says Blockchain Cannot Bypass Potential Sanctions. By Riza Dagoc Canonical URL: https://www.tokenpost.com/news/regulation/40159 Published: 2026-10-24T17:10:36.000Z Updated: 2026-10-24T17:10:36.000Z Section: Regulation > Prime Minister Benjamin Netanyahu said Oct. 23 that he had requested a contingency plan but gave no details on who would draft it or when it could be ready. Yair Avidan, a former Bank of Israel banking supervisor, said blockchain would not bypass legal restrictions on payments as Israeli Prime Minister Benjamin Netanyahu considers a plan for possible banking sanctions. Netanyahu’s [request for a blockchain plan to address potential banking sanctions]() came during a televised interview Oct. 23. He described blockchain as one possible option but did not name who would prepare the plan, which network or currency it might use, or when it could be ready. Banking sanctions can make it harder for importers to pay overseas suppliers if foreign banks refuse to process payments for a country’s banks. The added costs can reach consumers through supermarket prices. Avidan said payments using blockchain or digital tokens would still require banks, payment companies and trade partners. Those institutions remain bound by law and their own compliance obligations, he said. Blockchain could provide a backup if payment systems were disrupted, but it would not remove legal restrictions. Yarom Ariav, a former director general at Israel’s Finance Ministry, warned that discussing financial workarounds could unsettle capital markets and lead to a credit-rating downgrade. He said the rhetoric could put Israel in the same category as isolated governments such as Iran. Yair Zimon, a professor at Tel Aviv University, called the proposal extreme and dangerous. He argued that technology companies, venture capital firms and international investors would avoid a financial system built around unregulated cryptocurrency. More than 60 economists, scholars and former senior officials warned this week that expanding restrictions to Israel’s wider economy could raise living costs. They said inflation in a general food basket over the past four years was nearly five times the rate in the preceding four years. The concerns come as some countries consider trade measures tied to Israeli settlements. The U.K. banned imports of settlement goods in September and sanctioned people and companies involved in settlement construction. France, Canada and 11 other countries have signaled they may restrict trade in those goods. Separately, Bank Leumi, Israel’s largest bank, expects to offer Bitcoin trading through Galaxy Digital in early 2027, subject to approval from the Bank of Israel. Netanyahu gave no timetable for the blockchain plan. ## Links in this article - [request for a blockchain plan to address potential banking sanctions](https://www.tokenpost.com/news/regulation/39736)