- Israel approves first shekel stablecoin after two-year pilot with strict oversight rules.
- Bits of Gold will issue a 1-to-1 backed token with reserves held in Israeli accounts.
- Limited rollout begins as regulators prepare broader stablecoin law framework.
Israel has authorized the issuance of its first shekel-backed stablecoin, BILS, marking a new phase in the country’s approach to digital asset oversight. The approval was granted to Bits of Gold, a licensed financial asset service provider, following a review process that lasted about two years and included a regulatory pilot.
Authorities confirmed that the rollout will begin on a limited scale under predefined conditions, allowing operations to proceed while broader legislation on stablecoins remains under development.
Pilot Program and Regulatory Framework
The authorization follows a formalized pilot conducted within a regulatory sandbox environment. This framework allowed the company to test its ability to issue and manage a stablecoin under supervision while minimizing systemic risks. During the trial, regulators assessed operational processes, including custody management, customer asset protection, and compliance with reporting standards.
The stablecoin will maintain a 1:1 peg to the Israeli shekel. Reserve assets backing the token will be held domestically in specified and separate accounts. Regulators also require continuous liquidity management and redemption mechanisms to ensure that holders can exchange the token for fiat currency at any time.
Oversight conditions include strict requirements for technology risk management, cybersecurity safeguards, business continuity planning, and immediate reporting of material incidents. Authorities stated that supervision will remain ongoing as the project moves beyond the pilot phase.
Limited Launch and Policy Alignment
The issuance will begin in a controlled format with a predetermined scope, reflecting a cautious approach to introducing digital financial instruments. The move aligns with the government’s ongoing efforts to create a regulatory framework for stablecoins, including a forthcoming draft bill expected to be released for public consultation.
According to officials, the approval allows activity to begin before full legislative clarity is in place while ensuring adherence to existing regulatory standards. The initiative is positioned as part of a broader policy direction to regulate digital asset activity within the domestic financial system.
Market Context and Use Cases
The shekel-backed token is built to support blockchain-based transactions, including transfers, interbank settlements, and digital asset trading. Moreover, the infrastructure is expected to enable faster accounting processes between entities and support the development of additional financial services built on blockchain networks.
Data referenced by regulators shows that the global stablecoin market exceeds $320 billion, with U.S. dollar-pegged assets dominating the sector. In parallel, discussions on stablecoin regulation continue in the United States, where legislative proposals remain under review in the Senate, including provisions related to yield, tokenization, and governance standards.
Related: Lawmakers Move to Clarify Stablecoin Rewards in CLARITY Act
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