Israel clears first shekel-backed stablecoin after two-year review

Israel’s Capital Market Authority, the governing body that licenses and supervises financial innovators, has cleared the launch of a shekel-backed stablecoin issued by Bits of Gold, a licensed Israeli crypto operator, according to a LinkedIn announcement.

Branded as BILS, the stablecoin is fully backed and pegged 1:1 to the Israeli new shekel, operating on the Solana blockchain after a multi-year regulatory pilot. It is the first government-approved fiat-backed stablecoin in the Middle East.

BILS is built to support real time payments, on-chain trading and programmable finance with local currency exposure instead of reliance on dollar pegged tokens. Development also involved Fireblocks, with auditing provided by EY.

The dollar monoculture

The global stablecoin market has ballooned past $316 billion in total capitalization, per CoinGecko. Over 99% of that is pegged to the US dollar. USDT and USDC dominate so thoroughly that stablecoins are essentially a dollar monoculture.

The approval to launch BILS reflects the rising global adoption of regulated stablecoins as the sector expands rapidly. By bringing the shekel onto the blockchain rails, Israel seeks to strengthen its currency’s role in digital payments and counterbalance the influence of dollar-pegged tokens.

Restricted rollout

Israel’s regulators are restricting the early offering to a predetermined scale, likely institutional and qualified participants first. The Capital Market Authority is also imposing strict conditions around technology risk management, information security, business continuity, and ongoing reporting.

Israel’s regulators are simultaneously preparing a broader Stablecoin Law, expected to be circulated for public comment soon, that would formalize the entire regulatory framework for digital currency issuance.

The Bank of Israel has been exploring a central bank digital currency, but that decision isn’t expected until after 2026 at the earliest. BILS is a private-sector product operating under government supervision.

Israel’s crypto trajectory

Israel’s regulatory posture toward crypto has shifted gradually from outright skepticism to cautious engagement. The country has deep bench strength in cybersecurity and blockchain development, a natural byproduct of its tech-heavy economy and mandatory military service that funnels talent through intelligence units like 8200.

According to Bits of Gold’s announcement, the token enables holders to hold a digital shekel in a private wallet, transfer shekels instantly at any hour, and trade digital assets against the shekel around the clock.