Former Bank of Israel deputy governor Nadine Baudot-Trajtenberg today attacked the idea proposed by prime Minister Benjamin Netanyahu on the eve of the elections that Israel can bypass international sanctions using cryptocurrencies.
Speaking at the Globes Looking Beyond the Trend Conference organized in partnership with Altshuler Shaham Financial Services, she said, “In the cryptocurrency world, the only segment that bypasses, or is capable of bypassing sanctions is the truly dark underworld. You find people there whom you wouldn’t exactly want to associate with like drug traffickers, organ traffickers, and so on. So, do I want to conduct business with them? I don’t think so.”
Baudot-Trajtenberg participated in a panel moderated by Shai Shalev, *Globes*’ Capital Markets Editor, which also featured Shimon Uliel, Head of the Israel Investments Department at Altshuler Shaham Provident Funds and Pension.
Baudot-Trajtenberg said, “This specific interview [Netanyahu’s interview on Channel 10 on the eve of the elections] actually gave cryptocurrency a very bad reputation.”
She explained that the digital currencies that have gained traction in recent years are primarily “stablecoins” – assets pegged to the dollar, and more recently, to the shekel. “These are traded on platforms that require KYC (Know Your Customer) procedures to ensure that incoming funds are not subject to sanctions,” she said. According to her, currencies traded on the “dark web” do indeed exist, but they are marginal to the industry.
When asked whether she believed there was any substance to the statement, or if it was merely election propaganda, Baudot-Trajtenberg replied: “First of all, it is a truly unfortunate remark for two reasons. Firstly, the idea that sanctions could be circumvented using this mechanism, and secondly, the assumption, taken as a given, that sanctions are inevitable. That is the most troubling aspect.” She added, “It is in our power to take action to prevent sanctions, rather than simply saying, ‘That’s it-sanctions are coming, and we are effectively siding with organ traffickers.'”
“In the defense industries, there are threats of boycotts yet the orders keep coming in.”
The criticism on the crypto proposal was voiced as part of a broader warning issued by Baudot-Trachtenberg during the panel. “The Israeli economy is currently at a crossroads,” she said. “For 20 years, both the economy and the market have benefited from the truly remarkable integration of Israel into the global economy. Today, not only has the process of globalization slowed down worldwide, but we are also seeing boycotts, both anticipated and covert, which have already begun.”
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She said, “We are clearly aware about this in England and elsewhere. There is a precise, ready-made list of boycotts targeting Israel. If there is no internal political shift and no progress in how we manage the state and handle the dynamics of the conflict, we could face a powerful surge of actions, extending beyond mere boycotts, that would impact the Israeli economy and market.” She further noted that this is a trend that has been developing over the past few years, independent of who holds the administration in the US or political shifts in Europe.
Uliel presented a different picture on boycotts, particularly concerning the Israeli defense industry. “We met with all the defense companies listed on the Tel Aviv Stock Exchange, and I don’t recall any of them mentioning problems with those imposing boycotts,” he said. “Things may be said publicly, but at the end of the day, the orders still come in.”
Nevertheless, he noted that the fear of boycotts is now “Taken into account by us, the institutional investors, when we evaluate an investment in a company.” In this context, he pointed to Fidelity’s sale of shares in Next Vision, which raised such concerns, though the company described the event as purely technical.
“The problem with a halt to defense aid is the signal it sends, more so than the loss of the funds themselves.”
On the possibility of a halt in US defense aid, Uliel remarked that its current weight within Israel’s GDP is low, less than 1%, and noted that there could even be positive aspects to such a scenario. “Israel would become less dependent and more independent; certain industries or sectors, perhaps some defense companies, might actually benefit from this,” he said.
Baudot-Trajtenberg only partially agreed with this assessment. “An immediate halt to US defense aid would be problematic, especially if it were accompanied by restrictions on what Israel is permitted to procure,” she said. “Most of the aid is earmarked for procuring goods from the US, and the system is built around a specific type of import.” She added that this accounts for, at most, about 3% of the government budget, so, “a gradual weaning-off process is feasible. It won’t be easy, but it is manageable.”
“The biggest problem is that it sends a very strong signal that the US is no longer with us,” she continued. “We live in a dangerous world. We are still a relatively small nation and we are losing a key source of backing, precisely at a time when there is a growing wave of sentiment against us in many places. The fact that ‘Big Brother’ is no longer willing to foot the bill for us is a more significant signal than the loss of the funds themselves.”
Full disclosure: The conference was held in cooperation with Altshuler Shaham Finance and sponsored by Mizrahi Tefahot Bank, Bezeq, and Profit Financial Group.
Published by Globes, Israel business news – en.globes.co.il – on November 8, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
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