Israel signaled a more assertive regulatory stance toward stablecoins as policymakers acknowledged that private digital dollars have grown into a systemically relevant component of global payment flows. At a conference focused on the evolution of national payment systems, the central bank highlighted that stablecoins now support more than two trillion dollars in monthly transactions and have become deeply integrated into cross border activity, trading infrastructure and digital settlement functions. Officials noted that the sector’s current scale is comparable to the balance sheets of mid sized global banks, underscoring why regulators can no longer treat private stablecoins as marginal instruments. The governor emphasized that the regulatory perimeter must mature quickly to reflect actual usage across markets and to ensure the instruments remain sound during periods of stress. The discussion framed stablecoins not as speculative tokens but as increasingly important settlement rails linking traditional financial activity with digital environments that have expanded sharply over the past year.
A key concern raised during the event was the extreme concentration within the industry. With nearly all global activity controlled by two major issuers, policymakers warned that market structure risks have become more pronounced. Centralization amplifies the consequences of operational failures, reserve misalignment or disclosure gaps, and it creates single points of vulnerability for both trading platforms and payment systems that rely on stablecoins for liquidity. Officials outlined core regulatory pillars that private issuers must prioritize, including full reserve backing, high quality and liquid asset composition and a supervisory framework that scales with adoption. These elements were presented as essential safeguards to ensure that stablecoins function reliably as near money instruments that sit adjacent to the formal financial system. The remarks signaled that regulators intend to move beyond broad principles and implement more detailed requirements that could reshape how issuers manage reserves and structure disclosures.
The central bank also advanced its parallel work on a national digital currency, releasing a roadmap that pushes the digital shekel project toward more formal recommendations next year. Project leads described the CBDC as an instrument intended to function as widely accessible digital central bank money, integrating public sector oversight with the programmability offered by modern payment architectures. The emphasis on both stablecoin oversight and CBDC development reflected a broader strategy to modernize the country’s payment infrastructure while reducing long term dependence on private settlement tokens. Policymakers noted that global central banks are accelerating similar plans, and that clearer regulatory guidance for private issuers will be necessary to ensure stability while digital money use continues to expand. With concentration risks rising and stablecoin volumes reaching levels comparable to mid tier banking institutions, the shift toward more comprehensive oversight marks a notable transition point for the sector.
