Israel has approved the first limited distribution of a shekel-backed stablecoin, giving local crypto company Bits of Gold permission to issue BILS under direct regulatory supervision.

What was approved

The Israel Capital Market, Insurance and Savings Authority said Bits of Gold can begin a limited issuance after a two-year pilot and review process. According to the regulator's announcement, BILS must remain fully backed 1:1 by shekel reserves held in dedicated separate accounts in Israel. The approval also requires ongoing reporting, liquidity and redemption mechanisms, and controls around technology risk, cybersecurity, and business continuity.

Ynet reported that the launch will begin at a predetermined scale rather than as an open retail rollout. The authority also framed the approval as a bridge to a broader stablecoin bill that it says will be published for public comment.

Why it matters

Most stablecoin volume still runs through dollar-denominated tokens. A regulated local-currency token gives Israel a way to test blockchain settlement and payments without defaulting to the dollar as the unit of account. The regulator said the token could support blockchain-based transfers, faster settlement between financial institutions, and new financial services built on digital asset rails.

This is still a narrow approval, not a mass-market launch. That narrower framing is the real signal: Israel is moving from sandbox experimentation to live but tightly controlled stablecoin distribution, while keeping legal oversight and reserve protections at the center.