Over the past year, the use of bitcoin—an Internet-based “currency” that operates without the control of a central bank—has increased significantly, generating some debate about whether it is the wave of the future or simply a new market for financial speculation. Shmuel Even asks a different question, of particular import to Israel: can it be prevented from serving as a tool for terrorists?

Internet currencies do not claim to replace state currencies, but even if [they become mainstream without doing so], it is hard to dismiss the idea that they could deprive states and the financial establishments that control the global financial system of their exclusive hold over means of payment, just as the Internet deprives states and the media of their exclusive control of information. With the existing systems, it is hard for the state to track “new money” and its usage, so the main risk posed to states by these currencies is of financial activity moving beyond the state’s knowledge or reach.

This includes the financial activity of terrorist and criminal organizations, which can use virtual currencies to pay their activists, acquire weapons on the black market, buy forbidden substances, launder money, and move money from country to country with no supervision. In the future, this currency system could also be used to bypass sanctions imposed on countries and [other entities], including the purchase of banned substances and technologies, since it is a separate global financial system that is not controlled by states or banks. . . .

Israel is still formulating its position [with regard to cybercurrency]. . . . In an open letter of February 2014, the Bank of Israel warned the public about the dangers of using decentralized virtual currencies, and stressed that they were not legal tender. . . . The bank said that [the use of these currencies constitutes] “a high-risk factor with regard to money laundering and funding of terror,” since it facilitates anonymous financial transactions that bypass regulated systems. . . .

Israel would do well to accelerate the process of deciding on its approach, with an integrated examination of the subject by all the regulatory bodies involved. . . and in collaboration with other elements worldwide.

Analyzing the recent direct Iranian attack on Israel, and Israel’s security situation more generally, Michael Oren looks to the 2015 agreement to restrain Iran’s nuclear program. That, and President Biden’s efforts to resurrect the deal after Donald Trump left it, are in his view the source of the current crisis:

Of the original motivations for the deal—blocking Iran’s path to the bomb and transforming Iran into a peaceful nation—neither remained. All Biden was left with was the ability to kick the can down the road and to uphold Barack Obama’s singular foreign-policy achievement.

In order to achieve that result, the administration has repeatedly refused to punish Iran for its malign actions:

Historians will survey this inexplicable record and wonder how the United States not only allowed Iran repeatedly to assault its citizens, soldiers, and allies but consistently rewarded it for doing so. They may well conclude that in a desperate effort to avoid getting dragged into a regional Middle Eastern war, the U.S. might well have precipitated one.

While America’s friends in the Middle East, especially Israel, have every reason to feel grateful for the vital assistance they received in intercepting Iran’s missile and drone onslaught, they might also ask what the U.S. can now do differently to deter Iran from further aggression. . . . Tehran will see this weekend’s direct attack on Israel as a victory—their own—for their ability to continue threatening Israel and destabilizing the Middle East with impunity.

Israel, of course, must respond differently. Our target cannot simply be the Iranian proxies that surround our country and that have waged war on us since October 7, but, as the Saudis call it, “the head of the snake.”