Israel Tightens Oversight on Stablecoin Issuers Ahead of Digital Shekel Launch
Israel is ramping up regulatory scrutiny of private stablecoin issuers as it prepares to introduce its central bank digital currency, the digital shekel, by 2026. Bank of Israel Governor Amir Yaron emphasized the need for tighter controls during a payments conference in Tel Aviv, warning that unregulated stablecoins could undermine monetary stability.
The global stablecoin market has ballooned to over $300 billion in capitalization, with monthly transactions exceeding $2 trillion. Yaron noted that such adoption levels RENDER stablecoins a systemic concern, comparable in scale to a mid-sized commercial bank’s balance sheet.
Israeli officials are particularly wary of the dominance of USD-backed stablecoins, which account for 99% of the market. Tether and Circle’s outsized role poses structural risks, where operational disruptions at either issuer could Ripple through global payment networks.
