Israel Gives Nod to Local-Currency Stablecoin Following Bits of Gold’s Approval

TLDR

• Israel has approved BILS, a stablecoin pegged to the shekel that’s issued by Bits of Gold, a licensed cryptocurrency company.
• BILS received approval following a two-year pilot program run on the Solana blockchain.
• Reserves for BILS will be kept in Israel via dedicated, separate accounts.
• The token will enable real-time payments, on-chain trading, and programmable financial services.
• Israel’s approval of BILS coincides with regulators tightening rules around stablecoins, custody services, and cryptocurrency licensing.

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(SeaPRwire) –   Israel has authorized the launch of a shekel-pegged stablecoin by Bits of Gold, granting the local digital asset sector a regulated token directly linked to the nation’s currency.

The Capital Market, Insurance and Savings Authority gave the green light to the BILS stablecoin following a two-year pilot on the Solana blockchain. Bits of Gold, a licensed provider of financial asset services, will issue the token under strict regulatory oversight.

This approval permits a limited launch at a pre-set scale. The stablecoin will be backed by reserves stored in Israel in dedicated, separate accounts, with regulations governing liquidity, redemption processes, and regulatory reporting requirements.

BILS Stablecoin Receives Restricted Approval

BILS is engineered to keep a 1:1 peg with the Israeli shekel. The token will let users conduct real-time payments, trade on-chain, and develop programmable financial applications using a regulated local currency.

Youval Rouach, founder and CEO of Bits of Gold, stated that the stablecoin establishes a direct connection between the shekel and the global digital asset economy. The company has positioned BILS as a tool for users and businesses seeking blockchain-based transactions without being solely dependent on dollar-pegged tokens.

The launch happens at a time when dollar-backed stablecoins still lead the global market. The total market value of stablecoins has exceeded $320 billion, with Tether’s USDT and other U.S. dollar-pegged assets accounting for most of the sector’s activity.

A shekel-backed stablecoin provides Israel with a local-currency alternative in a market where most trading pairs and payment tools remain linked to the dollar.

Israel Broadens Cryptocurrency Oversight

This approval is part of broader efforts by Israeli authorities to regulate digital asset activities. The Israel Tax Authority and Finance Ministry have been pushing forward policies that outline how cryptocurrency businesses, stablecoins, brokers, custodians, and service providers should operate under local regulations.

Israel’s regulatory strategy has centered on licensing, consumer protection, reserve management, anti-money laundering (AML) rules, and counter-terrorist financing (CTF) standards. Authorities have also ramped up oversight of crypto wallets and transactions connected to illegal financial activities.

However, the approval of BILS does not grant unrestricted permission for all stablecoin activities. The launch remains limited and monitored, with the regulator establishing conditions for fund storage, token redemption by users, and activity reporting by the issuer.

The project’s structure prioritizes reserve management. Storing backing assets in Israel via separate accounts is meant to separate customer funds from the company’s assets and facilitate redemption claims.

Work on Digital Shekel Progresses

The approval of the stablecoin also comes as the Bank of Israel continues developing its Digital Shekel initiative. The central bank has been testing the feasibility of a central bank digital currency (CBDC) operating in the local economy and supporting future payment systems.

BILS is distinct from a CBDC because it is issued by a private licensed company instead of the central bank. Nevertheless, both projects indicate that Israeli authorities are exploring digital payment systems under formal regulatory supervision.

The shekel has also appreciated against the U.S. dollar, trading at approximately 0.34 dollars per shekel when the approval was granted. This currency context has drawn extra attention to the launch from market participants monitoring local-currency digital assets.

As a result, Israel’s approval of BILS positions the country among markets experimenting with regulated stablecoin models linked to domestic currencies. The project will now proceed under restricted conditions while regulators monitor its usage, reserves, and role in local cryptocurrency activity.