The Israel Capital Market, Insurance and Savings Authority (CMISA) has granted full regulatory approval to BILS, a shekel-pegged stablecoin developed by Bits of Gold – Israel’s licensed crypto broker and custodian – following a two-year pilot conducted on the Solana blockchain as part of the regulator’s sandbox, marking the conclusion of a process that officially began with the Bank of Israel’s 2023 discussion paper on the principles of stablecoin.
This is not just the launch of a nationally useful payment token. This speaks to a deliberate structural pattern: jurisdictions with mature financial regulators are now moving toward anchoring stablecoin issuance on local currency rails, establishing compliant alternatives to dollar-denominated tokens before the network effects of dollar-pegged instruments become structurally irreversible.
Source: ICM
We believe that the timing of CMISA’s approval is not coincidental. With the global market capitalization of stablecoins exceeding $320 billion at the time of approval – overwhelmingly concentrated in USDT and USDC – regulators in small reserve currency jurisdictions face an increasingly narrow window to establish local currency stablecoin infrastructure before dollar-denominated settlement becomes the de facto standard for on-chain trading. Israel’s approval is, in this sense, a calibrated preventive measure as much as a financial technology milestone at the national level.
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BILS and CMISA: How the Shekel-Pegged Stablecoin Approval Really Works
The mechanism works as follows: Bits of Gold developed BILS under the CMISA regulatory sandbox starting in March 2024, operating the token on the Solana blockchain throughout the pilot period in close coordination with the Israeli Tax Authority and the Ministry of Finance.
The two-year supervised pilot project was explicitly designed to test reserve management, custody arrangements and on-chain operational compliance prior to any large-scale public issuance.
Under the terms established by CMISA, BILS reserves must be held in segregated accounts in Israeli banks – foreign custody is excluded – a requirement that operationally ensures that the regulator retains direct access to audits and oversight over fiduciary support at all times.
The Bank of Israel’s 2023 working paper, which set out non-binding principles distinguishing fiat-backed stablecoins from algorithmic instruments, had specifically recommended that CMISA serve as the initial licensing authority for shekel-pegged issuers, with a potential transfer of oversight to the Bank of Israel itself if BILS achieved the scale of a systemically important payments system under rules analogous to the law Israeli on payment services.
Youval Rouach, founder and CEO of Bits of Gold, described BILS as “a direct bridge between the Israeli shekel and the global digital asset economy, enabling real-time payments, on-chain trading and programmable financial applications based on a regulated local currency.”
The stated use cases – instant payments, shekel-denominated on-chain exchanges, and programmable financial applications – are structurally consistent with the design goals prioritized by CMISA throughout the sandbox period, and the local reserve mandate significantly limits the systemic risks that are historically attached to stablecoin reserves held abroad.
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Daniel Frances is a technical writer and Web3 educator specializing in macroeconomics and DeFi mechanics. Hailing from crypto since 2017, Daniel leverages his experience in on-chain analytics to write evidence-based reports and in-depth guides. He holds certifications from the Blockchain Council and is dedicated to providing “insight gain” that overcomes market hype to find real utility for blockchain.
