sandmark.com
Israel’s Capital Market, Insurance and Savings Authority has approved the issuance of BILS (BILS), the country’s first stablecoin pegged to the Israeli shekel, for limited domestic use following a two-year pilot.
The regulator announced the decision on 28 Apr, granting approval to licensed crypto exchange Bits of Gold following an extensive review process. BILS will operate under strict oversight as a precursor to broader stablecoin regulations expected soon.
Two-year Solana pilot paves way
Bits of Gold conducted a dedicated pilot on the Solana blockchain to test issuance and operations. The stablecoin maintains a 1:1 peg to the shekel, with all reserve assets held in designated and separate accounts within Israel’s domestic banking system. Usage will remain limited in scope and subject to rigorous conditions covering technology risk management, information security, business continuity and ongoing reporting obligations.
This move forms a complementary step towards Israel’s forthcoming Stablecoin Law. The authority described the approval as positive news for the financial market, enabling faster blockchain-based money transfers, improved accounting between entities, and the development of advanced services while safeguarding financial stability and public protection.
Shekel stablecoin offers unique advantages
Unlike dollar-pegged stablecoins that dominate globally, a locally issued shekel version reduces exposure to foreign sovereign currency and monetary policy risks. It aligns more closely with Israel’s domestic economic conditions and regulatory environment, potentially lowering conversion frictions for local users and institutions.
The pilot signals Israel’s ambition to strengthen its position as a fintech and crypto innovation hub in the Middle East. By moving cautiously with full local reserves and licensed operators, authorities aim to balance technological advancement with robust consumer safeguards.
Regional instability drives stablecoin interest
The Israeli approval arrives amid heightened experimentation with stablecoins across conflict-affected areas. Earlier this year, the US-led Board of Peace evaluated dollar-based stablecoins to help revive Gaza’s war-damaged economy. Prolonged conflict has crippled local banking infrastructure, forcing reliance on physical shekels whose supply Israel has restricted, exacerbating cash shortages.
Separately, Iran has reportedly considered stablecoins for collecting oil tanker fees in the Strait of Hormuz to circumvent sanctions. These developments illustrate how geopolitical tensions and strained traditional finance systems are accelerating digital asset adoption in the region, making a regulated shekel stablecoin particularly relevant for cross-border and domestic resilience.
Cautious test case for national stablecoins
The initiative positions Israel to capture projected economic gains from crypto – up to $120bn over the next decade, according to the National Committee for Crypto Strategy – while maintaining tight regulatory control.