Israel Plans Financial War to Bankrupt Hamas by Devaluing Its Cash Reserves

Watan-Under the headline “Israel Ready to Use Monetary Weapons to Bankrupt Hamas,” the French newspaper Les Echos reported that Israel is planning a financial war aimed at bankrupting the Palestinian movement Hamas by withdrawing physical cash from circulation—particularly the 200-shekel notes—in an effort to nullify the group’s accumulated funds.

According to the report, Israeli Foreign Minister Gideon Sa’ar—backed by Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich—has proposed withdrawing 200-shekel banknotes (worth around €50), the largest denomination in Israeli currency. Alternatively, they may create a blacklist of specific banknote serial numbers known to be in Hamas’s possession.

Les Echos described this as a significant threat to Hamas, which is reportedly the largest employer in Gaza. Israeli intelligence estimates that Hamas has amassed massive cash reserves in the form of 200-shekel notes, totaling hundreds of millions of dollars.

The report says this money was either seized forcibly by Hamas fighters from local bank deposits during the 18-month war or collected through “traditional” methods, such as taxing goods and financial transactions at a minimum rate of 10%.

Experts cited in Les Echos suggest that much of the cash was delivered via armored trucks operated by the security company Brink’s. The serial numbers of these bills were recorded, meaning Israel could potentially track and void them. They even suggest creating an app to scan the notes and verify their validity.

An Israeli diplomat stated: “This method could trigger a financial collapse for Hamas and possibly accelerate the release of the 59 hostages the group still holds in Gaza.”

However, the Bank of Israel, which oversees monetary policy, expressed strong objections. It warned that the government may be overstepping its authority regarding currency control. It also pointed to failed European efforts to combat tax evasion and organized crime by withdrawing €500 notes, questioning the plan’s effectiveness. Les Echos also noted the extreme difficulty of enforcing such a policy.

For now, one thing is clear: Hamas has not surrendered—despite Israel resuming airstrikes and ground operations in Gaza after a two-month ceasefire ended on March 18.

Since the war began on October 7, 2023, more than 50,000 people—many of them civilians—have been killed, yet Hamas still controls a large part of daily life for the 2.3 million Palestinians in Gaza. Les Echos adds that, nevertheless, the group has been forced to significantly cut salaries for its fighters and civil servants. These wages continue to be paid in shekels—the currency of the “enemy”—as no alternative exists.