Israel has approved its first regulated shekel-pegged stablecoin, clearing licensed crypto firm Bits of Gold to issue the BILS token under a framework set by the country’s Capital Market Authority. The approval, granted on April 28, 2026, ends a two-year regulatory pilot that ran on Solana and makes BILS the first government-sanctioned, fiat-backed stablecoin in the Middle East. Each token is fully backed 1:1 by Israeli new shekels held in segregated bank accounts, with custody handled by Fireblocks and reserve auditing by EY. The decision pushes one of the world’s strongest-performing fiat currencies on-chain, giving Israeli businesses, traders, and developers a regulated alternative to dollar-pegged tokens like USDC and USDT for shekel-denominated activity.
A stablecoin is a cryptocurrency that maintains a fixed value relative to a reserve asset, usually a national currency, by holding the equivalent amount of that asset in custody for every token issued.
Key takeaways
- First-of-its-kind approval: BILS is Israel’s first regulated stablecoin and the first government-sanctioned fiat-backed stablecoin in the Middle East.
- Two-year pilot on Solana: Bits of Gold operated BILS in a regulatory sandbox starting in 2024 before receiving full Capital Market Authority approval on April 28, 2026.
- Institutional infrastructure: Fireblocks handles custody, EY provides reserve auditing, and Solana’s token extensions handle compliance features at the protocol level.
- Direct challenge to dollar dominance: BILS gives Israeli markets a non-dollar option for stablecoin payments, FX trades against USDC, and on-chain settlement.
Published: April 28, 2026 09:00 UTC
Why the Capital Market Authority signed off now
The approval marks the end of a structured pilot the Israel Capital Market Authority began in 2024 to test whether a privately issued, shekel-backed token could meet local consumer protection, anti-money laundering, and reserve transparency standards. Bits of Gold, a Tel Aviv-based licensed crypto service provider, was the only issuer admitted to the sandbox.
During the pilot the regulator evaluated reserve mechanics, cybersecurity controls, custody arrangements, redemption procedures, and privacy protections. Reserves were held in segregated accounts at Israeli banks and reconciled against on-chain supply daily. The Capital Market Authority confirmed in its decision that BILS now operates under full regulatory oversight in line with international stablecoin standards.
The Authority’s framework requires Bits of Gold to publish ongoing reserve attestations from EY, maintain 1:1 fiat backing at all times, and follow specific rules around redemptions, customer onboarding, and reporting. Tokens are issued and burned through Bits of Gold’s licensed platform, with mint and burn events visible on Solana.
What BILS unlocks for Israeli markets
The approval gives Israeli traders, fintechs, and protocols a domestic stablecoin they can use without dollar exposure. Until now, Israeli participants in crypto markets had to convert into USDC, USDT, or other dollar-pegged tokens to settle on-chain trades, hedge volatility, or move value across borders, even when the underlying transaction was shekel-denominated.
Bits of Gold has positioned BILS for four primary uses: liquidity provision in shekel-stablecoin pools, foreign exchange transactions against major dollar stablecoins, smart-contract execution involving local-currency settlement, and global shekel transfers for individuals and businesses. The company also expects banks and payment companies to integrate BILS for instant settlement and programmable payments.
The token is built using Solana’s token extensions, a set of protocol-level features that let issuers add compliance functions like permissioned transfers, transfer fees, and controlled minting directly into the token contract. That gives Bits of Gold the freezing and clawback tools regulators expect from a licensed stablecoin issuer without requiring a custom smart contract.
A non-dollar stablecoin enters a dollar-dominated market
The global stablecoin market is overwhelmingly dollar-denominated. USDT and USDC together account for the vast majority of stablecoin supply and transaction volume, while non-USD stablecoins remain niche. BILS now joins a small group of regulated, non-dollar fiat-backed tokens that includes the euro-pegged EURC and a handful of yen and sterling pilots.
The regulatory significance is larger than the market size. Israel’s approval is one of the first cases where a national financial regulator has authorized a privately issued stablecoin pegged to its own currency under a transparent rulebook, rather than pursuing a central bank digital currency or restricting issuance to banks. The Bank of Israel has been studying a digital shekel for years without committing to launch, and BILS effectively delivers a regulated digital shekel through the private sector first.
Other regulators, including those in the EU under MiCA and several Asian markets, are watching the model closely. A successful BILS rollout could give policymakers a template for approving local-currency stablecoins without waiting for a central bank to ship a CBDC, an outcome that would directly compete with dollar stablecoins in regional markets.
Compliance, controls, and what’s still to come
Bits of Gold remains responsible for know-your-customer checks, sanctions screening, and transaction monitoring on the issuance and redemption rails. Holders who acquire BILS on the open market still pass through compliance gates when they redeem with the issuer. The Capital Market Authority retains supervisory powers over the issuer, including the ability to suspend new issuance or require enhanced reporting.
The initial rollout is described as a limited launch, with broader availability expected as integrations with exchanges, payment providers, and DeFi protocols come online. Bits of Gold has not published exact issuance caps for the launch phase, but the framework allows scaling once operational milestones are met.
The next steps to watch are listings on major exchanges with Israeli or regional user bases, integrations into Solana-based DeFi protocols for shekel-pair liquidity pools, and how the Bank of Israel responds with its own digital shekel work now that a regulated private alternative exists.
Frequently asked questions
What is BILS and who issues it?
BILS is the first regulated stablecoin pegged 1:1 to the Israeli new shekel. It is issued by Bits of Gold, a licensed Israeli crypto service provider, under a framework approved by the Israel Capital Market Authority on April 28, 2026. Each token is backed by shekels held in segregated bank accounts and audited by EY.
Why is BILS built on Solana instead of Ethereum?
BILS uses Solana’s token extensions, which let regulated issuers build compliance features such as permissioned transfers and freeze controls directly into the token contract. Solana’s low fees and fast settlement also fit the payments and FX use cases Bits of Gold targets, though BILS could expand to other chains if regulators allow.
How does BILS compare to USDC for Israeli users?
USDC tracks the US dollar, so Israeli users face currency conversion costs and FX risk when settling shekel-denominated transactions. BILS removes that friction by giving local users a fully regulated, shekel-pegged token they can use directly for payments, on-chain settlement, and FX trades against USDC and other dollar stablecoins.
