The occupation and war that has been going on for three years in Gaza, the deaths of tens of thousands of Palestinians, the expansion of illegal settlements in the occupied West Bank and the military operations against the countries in the region are putting increasing pressure on Israel's international relations. Netanyahu, who has so far used his military power, technological capacity and American support as the main pillars of his foreign policy, has now started to openly discuss the possibility that his country may be excluded from the global banking system.
The fact that the Israeli Prime Minister brought up blockchain-based cryptocurrencies as an alternative to the traditional financial system cannot be considered only as a search for economic measures. This statement shows that the sanctions that Israel may face in its international economic relations are no longer seen as a theoretical threat but as a strategic risk for which preparations must be made at the government level. The main contradiction facing Netanyahu is that he thinks that he can neutralize the international pressure created by his policies with military methods through financial technologies. However, simply changing the payment method without eliminating the political reasons behind economic sanctions will not be enough to eliminate the consequences of international isolation.
THE ECONOMIC COST OF GAZA AND WEST BANK POLICIES
At the center of the international pressure that Israel faces is its occupation and war in Gaza and its policies in the occupied Palestinian territories. The number of Palestinian deaths in Gaza exceeding 74 thousand 500, the increase in settler violence in the West Bank, and the expansion of illegal settlements in East Jerusalem and other occupied areas have strengthened diplomatic and economic reactions against Israel. Netanyahu's statement that he will not allow the establishment of a Palestinian state and his continued commitment to expand settlement activities further deepened the disagreements in relations with European countries. The fact that at least 12 major economies, including the UK, agreed on coordinated measures against settlement activities, the European Union imposed sanctions on individuals and organizations linked to settlements, Spain and Ireland imposed restrictions on settlement products, and the Netherlands banned the import, purchase and sale of these products in September, stand out as concrete examples of economic pressure. Israeli attacks that continue despite the ceasefire in Southern Lebanon and military operations against Iran are also among the topics that increase regional tension. The truth revealed by these developments is that the cost of Israel's military operations can no longer be measured only by the defense budget. International trade relations, investment environment, technology partnerships and financial reliability are also at risk of being directly affected by the consequences of these policies.
SANCTIONS EXCEEDING ACCOUNT WITH CRYPTO CURRENCY: THE FIRST SIGN OF A BREAK FROM THE FINANCIAL SYSTEM
Netanyahu's statement in an interview with Channel 10 that an alternative economic system that could overcome international banking sanctions should be prepared started an important discussion about the future of the Israeli economy. Bitcoin, stablecoins and other digital assets can enable cross-border payments without the direct intermediary of traditional banks. Information that Russia used crypto assets in some of its international payments following the sanctions it faced due to the Ukraine war explains why this method has come to the fore for countries under sanctions. However, the basic fact that should not be overlooked here is that cryptocurrencies do not offer a comprehensive economic infrastructure that can replace the global banking system.
Israel's international trade, defense industry, high-tech production and foreign investment relations are not just about money transfers. These areas are based on financial trust, legal obligations, international insurance systems, technology supply and corporate banking relationships. In addition, carrying out a transaction within the scope of sanctions through crypto money does not automatically make the transaction in question legal. Israel's real problem is not with which technology the money will be transferred, but whether international economic actors will continue to trade with Israel. Netanyahu's proposal is therefore a controversial attempt to limit the possible consequences of financial sanctions rather than solving their root causes.
ECONOMIC SECURITY CRISIS BETWEEN THE CENTRAL BANK OF ISRAEL AND NETANYAHU
One of the strongest institutional objections to Netanyahu's cryptocurrency proposal came directly from the Bank of Israel. The Central Bank stated that crypto assets are not a reliable way to bypass international sanctions and emphasized that the country's economic relations with its main trading partners should be protected. The bank's approach is based on preventing political developments that could lead to sanctions, rather than creating alternative payment systems to avoid sanctions.
Netanyahu, on the other hand, thanked the Central Bank's recommendations and declared that he would implement the policies he thought were right, clearly revealing the difference of opinion between the economic institutions and the political administration. Moreover, more than 100 experts, including former senior Israeli officials, warned that the cryptocurrency plan could cause huge and irreversible damage to the Israeli economy. Experts pointed out that such methods are mostly associated with the financial transactions of criminal organizations, and brought to the agenda the problems that the proposal could create in terms of Israel's international economic reputation. The issue here is not just a technical disagreement between the Central Bank and the government. While Israel's economic management advocates preventing the country from drifting away from global financial relations, Netanyahu wants an alternative system to be prepared against the possibility of such a break. This divergence shows that the distance between political decisions and the priorities of economic institutions is gradually widening.
AMERICAN AID WILL NOT LAST FOREVER: NETANYAHU'S CONCERNS ABOUT Washington
The most striking element in Netanyahu's statements is his acceptance that Israel must prepare not only for European sanctions but also for a period when American military and financial support may decrease. The Israeli Prime Minister stated that the USA has changed and the billions of dollars of military support provided by Washington will not continue indefinitely at the current level. He warned that a less favorable American administration for Israel may be encountered in the period after Trump's term ends. This statement brings to the fore an important vulnerability regarding American support, which is at the core of Israel's security architecture. While the occupation and war in Gaza caused the growth of segments of the American public that question unconditional military aid to Israel, discussions within the Democratic Party also indicate that Washington's future policies may change. American support is critical for Israel to finance its wars, access advanced weapon systems, and maintain the defense industry's international supply chains. Netanyahu's call to strengthen his own military financing capacity reveals that this dependence is now considered a strategic risk. However, it is not possible to compensate for a possible decrease in American support with new financing instruments alone. The production capacity of the defense industry, technology transfer, international cooperation and diplomatic relations are the elements of this process that cannot be considered separately from each other.
PRESSURE FROM INTERNATIONAL COURTS ON ELECTION COURTS
There are also ongoing processes in the field of international law behind Netanyahu's concerns about economic sanctions. Netanyahu, for whom an arrest warrant has been issued by the International Criminal Court for war crimes and crimes against humanity, is also facing political pressure from the genocide case filed by South Africa against Israel at the International Court of Justice. A possible decision against Israel at the International Court of Justice could lead states to consider new restrictions on arms exports, trade and financial relations. However, it should also be noted that comprehensive international sanctions against Israel's banking system have not yet been implemented. Therefore, Netanyahu's cryptocurrency proposal is more of a preparation for more severe sanctions that may arise in the future, rather than overcoming an existing financial blockade.
This debate was also harshly criticized by Gadi Eisenkot, one of Netanyahu's most important rivals, before the October 27 elections. Yashar Party leader Eisenkot described the Prime Minister's proposal as a threat to national security and argued that the Israeli economy could be damaged for future generations. Eisenkot's criticism, which questions whether it is realistic for international technology companies such as Google to bypass the traditional banking system and make payments with cryptocurrency when purchasing Israeli companies, clearly reveals the issue's relevance in the technology sector. Considering Israel's integrated nature with the global technology economy, the weakening of international financial relations could threaten not only the state budget but also the country's economic growth model.
CAN MILITARY POWER PREVENT ECONOMIC ISOLATION? THE STRATEGIC TEST AHEAD OF ISRAEL
The main strategic problem that Israel faces today is the gradual deterioration of the balance between its military capacity and international economic and diplomatic relations. While the Netanyahu administration continues its current security approach despite the international reactions caused by the war in Gaza and settlement policies in the West Bank, it is discussing developing new financial mechanisms against the economic consequences of these policies. However, the functioning of the global economy does not only consist of money transfers. A country's access to the international financial system, investors' trust, trading partners' legal obligations and technology supply chains form the basis of long-term economic stability. Although alternative instruments such as crypto money can be used in certain transactions, they cannot alone change the rupture in diplomatic relations, sanction risks or commercial decisions of international companies. The most important strategic impasse in Netanyahu's approach emerges here: Instead of re-evaluating the consequences of foreign policy in order to reduce Israel's international isolation, technical methods that can overcome the financial effects of these consequences are sought. But no digital currency system can reproduce the diplomatic trust a country has lost; No blockchain technology can eliminate international legal responsibilities. The real determining factor for Israel is not the search for ways to avoid economic sanctions, but the future of the political and military choices that brought these sanctions to the agenda. In this respect, Netanyahu's cryptocurrency launch should be considered not only as an economic proposal put forward before the election, but as the beginning of a much more comprehensive discussion about the sustainability of Israel's current foreign policy line.
