Israel approves shekel-backed stablecoin BILS pilot

On April 27, Israel’s Capital Market, Insurance and Savings Authority authorized BILS, a shekel-pegged stablecoin issued by licensed virtual-asset provider Bits of Gold, to operate in a limited pilot. The authorization requires Bits of Gold to hold matching cash reserves in Israeli bank accounts for each token and to allow holders to redeem tokens for shekels.

The regulator wrote the activity will be carried out “under the Authority’s strict conditions, including technology risk management, information security, business continuity and ongoing reporting obligations.” It specified that “the offering will take place in a limited format and in a predetermined scope.”

Under the approval, Bits of Gold must maintain on-shore reserves and submit regular reports to the authority. The conditions require firms to show systems for managing technology risks and ensuring continuity of business operations in case of disruptions.

The authorization is included in a government effort to create uniform rules for stablecoins. A memorandum for a draft Stablecoin Law is being prepared and will be released for public comment. Officials plan to invite feedback from individuals, companies and industry experts before finalizing the draft. The pilot is intended to let regulators evaluate operational, security and consumer protection issues while the law is developed.

Officials and industry backers listed potential uses for a shekel-backed token, including faster payments using blockchain rails, lower transfer costs and near-instant settlements between businesses. Supporters expect the pilot to serve as a regulated testing ground for tokenized payments and commercial settlements in Israel.

At the time of the authorization, the global stablecoin market had a market capitalization of about $320.4 billion and aggregate trading volume near $35.4 billion. Authorities in other countries are advancing similar initiatives: euro-linked tokens are gaining traction in Europe and issuers in Japan plan JPY-pegged stablecoins that could reach tens of billions in supply. Jeremy Allaire, CEO of Circle, has predicted a yuan-backed stablecoin could appear within three to five years.

In the United States, the GENIUS Act 2025 has influenced the legislative discussion while the CLARITY Act faces delays. Market flows showed roughly $3.3 billion in stablecoin movements in April. Pablo Hernández de Cos, general manager of the Bank for International Settlements, urged international collaboration on cross-border regulatory frameworks.