Israel's Capital Market Authority on April 27 approved the country's first regulated fiat-backed stablecoin, BILS, a 1:1 shekel-pegged token issued by licensed exchange Bits of Gold on the Solana blockchain. The approval followed a two-year regulatory sandbox evaluation covering issuance procedur...
"BILS creates a direct bridge between the Israeli shekel and the global digital assets economy." — Yuval Rouach, CEO, Bits of Gold
Israel's Capital Market Authority on April 27 approved the country's first regulated fiat-backed stablecoin, BILS, a 1:1 shekel-pegged token issued by licensed exchange Bits of Gold on the Solana blockchain. The approval followed a two-year regulatory sandbox evaluation covering issuance procedures, custody protocols, cybersecurity, and business continuity. Fireblocks provides custody infrastructure; EY conducted the security audit.
The move puts the Israeli new shekel — currently trading at 2.98 per dollar, its strongest level since 1995 — onto programmable rails in a stablecoin market that exceeds $320 billion in total capitalization but remains 99% denominated in U.S. dollars. BILS is the first government-approved fiat-backed stablecoin in the Middle East, and Israel's regulators are preparing a broader Stablecoin Law for public comment.
The approval arrives as non-dollar stablecoins reach an inflection point. Euro-denominated stablecoins have grown twelvefold in the past 15 months and now command 80% of all non-USD stablecoin volume, according to Visa and Dune Analytics research. Japan launched JPYC in October 2025. Singapore's StraitsX has recorded $1.8 billion in cumulative SGD stablecoin volume. The shekel joins an accelerating queue of developed-market currencies testing blockchain settlement.
The Capital Market, Insurance and Savings Authority — Israel's financial services regulator — authorized Bits of Gold to issue BILS under a purpose-built rulebook developed during a two-year sandbox process. The sandbox evaluated six domains: issuance procedures, client asset custody, risk management protocols, business continuity planning, cybersecurity standards, and ongoing regulatory compliance.
Amit Gal, a Capital Market Authority official, stated the framework aims to support "technological innovation alongside maintaining financial stability, protecting the public of customers and reducing systemic risks."
The regulator imposed conditions including immediate disclosure of material changes or exceptional events, ongoing supervisory monitoring, and a phased rollout restricted to predetermined scale — likely targeting institutional and qualified participants initially. Full consumer access timelines have not been disclosed.
Israel's regulators are concurrently drafting a broader Stablecoin Law expected to be circulated for public comment. This legislation would formalize the entire regulatory framework for digital currency issuance, moving beyond sandbox-based case-by-case approvals toward a codified regime. The Bank of Israel continues parallel exploration of a central bank digital currency, though no issuance decision is expected in 2026.
Token specifications:
| Parameter | Detail | |---|---| | Token name | BILS | | Peg | 1:1 Israeli new shekel (ILS) | | Blockchain | Solana (sub-400ms settlement) | | Custody | Fireblocks | | Security audit | EY (Ernst & Young) | | Privacy technology | QEDIT | | Reserve location | Segregated accounts in Israeli banks | | Reserve ratio | 100% fiat-backed | | Redemption | Continuous availability |
BILS operates on Solana, leveraging the network's throughput for settlement at sub-400-millisecond finality. Fireblocks, the institutional-grade digital asset custodian, provides wallet infrastructure and key management. QEDIT, an Israeli zero-knowledge proof firm, contributes privacy technology.
Reserve shekel deposits are held in designated, segregated bank accounts within Israel — a structure that maintains all collateral under domestic banking regulation and central bank oversight. The 100% reserve requirement with continuous redemption mirrors the structural model adopted by Circle for USDC and mandated under the EU's MiCA framework for electronic money tokens.
Targeted use cases include: instant liquidity provision for crypto markets, foreign exchange transactions against USDC and other stablecoins, smart contract execution without intermediaries, and global shekel-denominated value transfers from digital wallets.
Bits of Gold, founded in 2013 by brothers Yuval and Yonatan Roash in Tel Aviv, is the longest-operating cryptocurrency exchange in Israel. The company became the first Israeli firm to receive a Capital Market Authority virtual asset service provider (VASP) license.
Key operational data:
The company has survived a decade of Israeli banking hostility toward crypto businesses, including a landmark Supreme Court case that preserved its banking access. Its selection as the sole BILS issuer reflects its regulatory track record and the absence of comparable licensed competitors in the Israeli market.
The approval coincides with exceptional shekel strength. The ILS/USD rate fell to 2.98 on April 28, 2026 — its lowest (strongest for the shekel) since 1995. The shekel has appreciated approximately 19% against the dollar over the past 12 months, making it one of the strongest-performing developed-market currencies.
Key FX data points:
The appreciation is driven by surging foreign direct investment in Israel's technology sector. The $39 billion in 2025 investment inflows — a 56% year-over-year increase — convert into shekels, creating sustained buying pressure. This currency strength gives BILS holders exposure to a fiat asset that has materially outperformed dollar-denominated stablecoins on a purchasing-power basis over the past year.
However, the same strength presents a headwind for adoption. Cross-border remittance users and export-oriented businesses — natural stablecoin use cases — face declining competitiveness as the shekel appreciates. The economic incentive to hold a shekel stablecoin rises when the underlying currency strengthens, but the transactional utility diminishes if pricing becomes uncompetitive in global markets.
The global stablecoin market exceeds $320 billion in capitalization with approximately $46 trillion in annual transaction volumes. Dollar-pegged tokens — primarily USDT ($189.8 billion, 59.2% market share) and USDC — comprise over 99% of total supply.
Non-dollar stablecoins remain marginal in absolute terms but are accelerating:
Euro stablecoins dominate the non-dollar category. According to Visa and Dune Analytics, EUR-denominated stablecoins have grown twelvefold in 15 months, reaching $777 million in monthly volumes by March 2026. They command 80% of non-USD stablecoin market share. Circle's EURC holds approximately 41% of euro stablecoin market capitalization, surging from 17% to 42% over 12 months. However, total euro stablecoin market cap remains below 1% of the global supply — a fraction that the EU's MiCA framework, with its 100% reserve mandates and ban on interest payments, has paradoxically entrenched by making euro stablecoins "ultra-safe but commercially weak," per recent industry analysis.
Japanese yen stablecoins entered production in October 2025 when JPYC Inc. launched its 1:1 yen-pegged token classified as an Electronic Payment Instrument. Corporate payment trials completed in 2025 are expected to drive commercial deployment in 2026.
Singapore dollar stablecoins issued by StraitsX have accumulated $1.8 billion in cumulative transaction volumes, benefiting from Singapore's framework that permits issuance pegged to SGD, USD, and other G10 currencies.
Asia's stablecoin market is approaching $300 billion in 2026, and analysts project the region will evolve into a multi-currency stablecoin corridor.
BILS enters this landscape as the first Middle Eastern entrant and the first regulated stablecoin backed by a non-G7, non-eurozone developed-market currency. The shekel's 19% appreciation against the dollar over the past year — compared to the euro's weaker trajectory and the yen's historic depreciation — gives it a distinct positioning among non-dollar stablecoin options.
Applying an economic-value-distribution lens to BILS reveals several structural dynamics:
Fee capture: Bits of Gold controls the full issuance and redemption stack. Minting and burning fees accrue entirely to a single licensed entity, creating a concentrated revenue model unlike multi-issuer stablecoin ecosystems.
Infrastructure costs: Running on Solana keeps per-transaction costs in the sub-cent range. Fireblocks custody fees and EY audit costs represent fixed overhead that scales favorably with token circulation growth.
Banking dependency: All reserves sit in Israeli bank accounts. The revenue share between Bits of Gold and its banking partners for float income on shekel reserves is not publicly disclosed, but represents a material value extraction point — as it does for all fiat-backed stablecoin issuers.
Regulatory rent: The two-year sandbox process and Capital Market Authority licensing create a regulatory moat. No competing shekel stablecoin issuer has been authorized, giving Bits of Gold effective monopoly positioning until the forthcoming Stablecoin Law opens a codified application pathway.
Network effects: BILS must bootstrap liquidity from scratch. Without integration into major exchange pairs or DeFi protocols, the token faces the cold-start problem that has constrained every non-dollar stablecoin to date. The global stablecoin market's 99%-plus dollar dominance reflects network effects that are structurally difficult to displace.
The BILS approval is a regulatory event, not a market event — at least not yet. Israel has created a sandbox-to-production pathway for a fiat-backed stablecoin that meets institutional-grade custody, audit, and reserve standards. Whether it generates meaningful transaction volume depends on exchange integrations, DeFi liquidity bootstrapping, and the eventual terms of the forthcoming Stablecoin Law.
The shekel's currency strength provides a temporary tailwind for holder demand but is insufficient to overcome the structural dollar dominance in stablecoin markets. Euro stablecoins, backed by the world's second reserve currency and a comprehensive regulatory framework, have taken 15 months to reach $777 million in monthly volume. A shekel stablecoin, backed by an economy with a $530 billion GDP, faces proportionally steeper adoption curves.
What the approval does demonstrate is a regulatory model: a defined sandbox period, explicit evaluation criteria, single-issuer authorization with conditions, and a parallel legislative track toward codification. For other developed-market regulators considering non-dollar stablecoin frameworks, Israel's two-year sandbox-to-approval pipeline provides a replicable template. The economic question — whether non-dollar stablecoins can capture meaningful share against entrenched dollar network effects — remains open.