Israeli and Foreign Banks Block Aid to Gaza, Driving Donors to Use Cryptocurrencies
January 5, 2026 – Gaza Strip and Israel
More than a million people trapped in the Gaza Strip continue to endure harsh winter conditions while living in tents, struggling for survival amid ongoing conflict. In a humanitarian response, Jewish and Arab citizens of Israel have been attempting to send aid to Gaza residents. However, these efforts have been severely hampered by financial institutions both within Israel and internationally, which have blocked many transactions due to concerns over funds potentially reaching terrorist organizations.
Banking Restrictions Hamper Aid Transfers
Numerous credit card companies and banks have imposed strict restrictions on donations directed to Gaza. Many donors attempting to transfer even small amounts of money directly to families face outright failures in payment apps and crowdfunding platforms. The banking institutions involved cite legal obligations to prevent financing that could inadvertently support terrorist groups.
Following the outbreak of war, Gaza was effectively treated as a “hostile territory” by Israeli and international financial systems. This designation rendered direct bank-to-bank transfers between Israel and Gaza impossible. Initially, donors tried routing funds through banks in the West Bank to avoid direct links to Gaza. However, recipients often faced exorbitant fees—sometimes as high as 50 percent—due to the collapse of Gaza’s banking infrastructure and severe cash shortages. Cash remains the only practical form of payment for many during the conflict.
Innovative Workarounds and the Rise of Crypto Aid
To overcome these challenges, volunteers devised alternative methods to continue channeling aid. Adva Barkai-Ronayne, an Israeli veterinarian residing in Canada, became a key figure managing a nonprofit organization dedicated to assisting dozens of Gaza families. She explained the complexity of these financial maneuvers:
“At first, we used our personal accounts, but it quickly became clear how problematic that was — it looked like a textbook case of money laundering. So we established a nonprofit in Canada to receive donations and transfer them to families. We meticulously document every transaction and donor.”
Despite these precautions, Canadian banks maintain a tough stance, often requesting impossible details such as full addresses of families living in tents, whose homes have been destroyed. Still, Barkai-Ronayne notes her group has developed a workable system that generally takes about a week for funds to clear.
Currently, about 60 aid networks operate under the Canadian nonprofit. Each supports one family, providing essential assistance like food, clothing, tents, and winter supplies. Volunteers emphasize that all funds are carefully monitored to ensure they do not support terrorist activities.
Credit Card Companies and Banks Intensify Obstacles
Isracard and some other Israeli financial service providers frequently block donations even when routed through foreign accounts. Transfers mentioning "Gaza" in their description are especially prone to being canceled, classed as prohibited actions per company policy.
Talia Levin, an Israeli volunteer living in Portugal, described her recent experiences:
“Transferring money to the Bank of Palestine was initially straightforward, but suddenly transactions began bouncing back. The bank informed me a German intermediary had flagged the transactions.”
Even when funds reach Gaza, recipients face further hurdles. A father living in tents for three winters, connected to Levin’s volunteer network, had his bank freeze his account upon receiving money from Canada. He had to endure long, inconvenient hours at a bank branch to regain access to these essential funds.
Cryptocurrencies Emerge as a Vital Channel
Faced with mounting restrictions, volunteers have increasingly turned to cryptocurrencies. Transfers using crypto apps offer near-instant delivery of funds, circumventing the traditional banking blockades.
“At first, currency exchanges demanded high fees,” said one volunteer, “but now local ‘PayPal’-style accounts have emerged, allowing recipients to use crypto directly.”
Grassroots Appeals Amid Social and Political Challenges
Volunteers highlight the difficulty of raising awareness and empathy, especially among Israelis who may be isolated from Gaza’s dire reality. Barkai-Ronayne stressed that donations are meager sums barely sufficient for basic survival, supplying essentials such as food, clothing, and medical supplies.
Another aid group, run by social activists from Israel’s Arab community, operates under strict protocols—only women receive funds, recipients must present identification, and only small sums supporting single families are sent. They also report a diverse donor base including many Jewish contributors from Israel and abroad.
Official Humanitarian Organizations Also Struggle
Even established NGOs like Physicians for Human Rights have been affected. Early in the conflict, the group attempted to purchase medical supplies in Egypt for Gaza hospitals. Funds transfer attempts via Bank Hapoalim were blocked, and the NGO faced threats of account freezes. Despite contacting Israeli authorities responsible for coordinating humanitarian efforts, obstacles remain.
The financial blockade intensifies the humanitarian crisis in Gaza, placing immense pressure on grassroots activists and volunteers. While political and security concerns underpin these restrictions, the result is a severe bottleneck restricting urgently needed aid. As banking institutions err on the side of caution, cryptocurrency and international nonprofit frameworks have become critical lifelines for Gaza’s vulnerable population.
Photo credits: Mahmoud Issa/Reuters, Abdel Kareem Hana/AP
For ongoing coverage on this topic and related humanitarian efforts, visit Haaretz Israel News.