Bitcoin Could Be a Boon to Terrorists

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.

Read more at Institute for National Security Studies

More about: Finance, Internet, Israel & Zionism, Israeli Security, Terrorism

Egypt Is Trapped by the Gaza Dilemma It Helped to Create

Feb. 14 2025

Recent satellite imagery has shown a buildup of Egyptian tanks near the Israeli border, in violation of Egypt-Israel agreements going back to the 1970s. It’s possible Cairo wants to prevent Palestinians from entering the Sinai from Gaza, or perhaps it wants to send a message to the U.S. that it will take all measures necessary to keep that from happening. But there is also a chance, however small, that it could be preparing for something more dangerous. David Wurmser examines President Abdel Fatah el-Sisi’s predicament:

Egypt’s abysmal behavior in allowing its common border with Gaza to be used for the dangerous smuggling of weapons, money, and materiel to Hamas built the problem that exploded on October 7. Hamas could arm only to the level that Egypt enabled it. Once exposed, rather than help Israel fix the problem it enabled, Egypt manufactured tensions with Israel to divert attention from its own culpability.

Now that the Trump administration is threatening to remove the population of Gaza, President Sisi is reaping the consequences of a problem he and his predecessors helped to sow. That, writes Wurmser, leaves him with a dilemma:

On one hand, Egypt fears for its regime’s survival if it accepts Trump’s plan. It would position Cairo as a participant in a second disaster, or nakba. It knows from its own history; King Farouk was overthrown in 1952 in part for his failure to prevent the first nakba in 1948. Any leader who fails to stop a second nakba, let alone participates in it, risks losing legitimacy and being seen as weak. The perception of buckling on the Palestine issue also resulted in the Egyptian president Anwar Sadat’s assassination in 1981. President Sisi risks being seen by his own population as too weak to stand up to Israel or the United States, as not upholding his manliness.

In a worst-case scenario, Wurmser argues, Sisi might decide that he’d rather fight a disastrous war with Israel and blow up his relationship with Washington than display that kind of weakness.

Read more at The Editors

More about: Egypt, Gaza War 2023