Israeli Foreign Minister Gideon Sa’ar has urged Prime Minister Benjamin Netanyahu to convene an urgent meeting about the scheme to cancel the 200-shekel bill as part of a larger move to deprive Hamas of its estimated large sums of cash, Hebrew media reported on Sunday.
“There is an urgent need for an economic war on Hamas,” Sa’ar wrote in a letter submitted to Netanyahu.
“As long as the Bank of Israel persists in its refusal to cooperate with the move, I will propose to examine its advancement through a government decision and legislation, if necessary,” the letter states.
Hamas, experts believe, has accrued cash worth some 3 billion to 4 billion shekels ($825.4 million to $1.1 billion), of which some 80% is in 200 shekel bills.
The proposal to take the 200-shekel note out of circulation was floated in 2024, but was rejected at the time by Bank of Israel Governor Amir Yaron.
It was resurfaced last week by the foreign minister, this time with the narrower plea to at least terminate the series of 200 shekel notes circulating in Gaza—only to be turned down again by the BoI, on April 24.
In an official statement, the bank said, “The authority to cancel banknotes by law belongs to the Governor of the Bank of Israel. Despite the issue being raised, no sufficiently well-founded professional justification for the cancellation of any particular banknote has been presented to the Governor.”
It went on to state: “The proposals brought forward by various parties do not meet any professional standard, their implementation is not feasible, and they were neither formally presented to the Governor nor coordinated in any way with the Bank of Israel. Therefore, the Governor does not intend to exercise his authority to cancel any banknote or to alter the composition of banknotes in circulation.”
In an earlier letter sent to the BoI governor, Sa’ar stated that terminating the 200-shekel bill “will dramatically harm Hamas’s economic capacity, will create significant difficulties in paying salaries to its operatives, and will harm its ability to recruit additional terrorists to its ranks, its ability to acquire ammunition and logistical supplies, maintain governance functions and buy the loyalty of its supporters.”
He went on to assess that given the growing protests in Gaza, as well as Hamas’s financial stress, “such a heavy economic blow could make a substantial contribution to achieving the war’s goals—eliminating Hamas as a military and governmental entity and returning the kidnapped to their homes.”
However, economist professor Omer Moav told Ynet News that the idea was problematic.
There is “no doubt” that the move will “make things harder for Hamas, as well as all the residents in Gaza,” said Moav.
But, he added, this policy could harm Israeli citizens too. “Naturally, such a move cannot be carried out overnight, because many of those banknotes—the series primarily found in Gaza—are also in circulation within Israel, and not only in Israel,” Moav stressed.
The meaning, he continued, is that people will become cautious about accepting terminated bills, which will complicate transactions.
But other experts think differently.
“We discovered that we know the serial numbers of almost all the bills in the Gaza Strip. They received the shekel bills via Brinks trucks from Israeli banks, so there is a record of them all,” Adam Reuter, Financial Immunities chairman and one of the leaders who formulated the previous plan to terminate the 200-shekel bill, told Globes on Sunday.
“It is possible to lead to a significant cash crunch in Hamas, which is the largest employer in Gaza,” he went on to say. “If it knows that the money will be worthless, it will be stressed out.”