Israel has approved the country’s first stablecoin pegged to the national currency, marking a significant step toward integrating blockchain technology into the regulated financial system. The approval was granted to crypto company Bits of Gold after an extensive review process and a dedicated pilot program that lasted nearly two years.
The initiative was authorized by the country’s financial regulator, the Israel Capital Market Authority, which oversees digital asset service providers operating in Israel. The stablecoin will initially be issued in a limited format and within a predetermined scope as part of a controlled rollout designed to monitor operational and financial risks.
According to the regulator, the digital token will be fully backed by the Israeli shekel at a 1:1 ratio. This means each unit of the stablecoin will correspond to one shekel held in reserve.
The reserve assets supporting the token will be stored in designated accounts within Israel and kept separate from the company’s operational funds to ensure transparency and investor protection.
Authorities emphasized that the project will operate under strict regulatory requirements. These include comprehensive technology risk management frameworks, robust cybersecurity standards, business continuity planning, and ongoing reporting obligations to regulators.
The safeguards aim to ensure that the introduction of blockchain-based financial infrastructure does not compromise financial stability or consumer protection.
The launch is also aligned with broader regulatory developments in the country. Israeli authorities are preparing to publish a draft legislative framework for stablecoins that will be opened for public consultation in the coming months. The proposed law is expected to establish clear rules governing the issuance, reserve management, and supervision of stablecoin providers.
Industry observers say the move could represent an important milestone for Israel’s fintech sector. By approving a regulated shekel-backed stablecoin, policymakers are signaling support for financial innovation while maintaining strong oversight.
If successful, the initiative could enable faster settlements between financial institutions, facilitate blockchain-based transfers, and support the development of advanced digital payment services.
Regulators have indicated they will continue promoting responsible technological innovation as the country works toward a comprehensive regulatory framework for digital assets and stablecoins.
