Timor Belan
Partner

Timor Belan is a Partner with Gornitzky GNY and has been a member of the firm’s management committee since 2020.

Timor represents private and public companies, investment funds, and private investors from Israel and abroad in mergers and acquisitions and investment transactions across various fields and industries.

Alongside his corporate and commercial practice, Timor specializes in compliance and international investigations. He advises private and public companies, including banks, financial institutions, fintech and blockchain companies, and their officers, on anti-money laundering, foreign corruption, cyber, and privacy matters.

He represents clients in complex civil, criminal, and regulatory proceedings in Israel and abroad, and has extensive experience in sensitive regulatory matters before law enforcement authorities, as well as internal investigations and audits conducted across several continents in collaboration with leading international law firms.

Timor was chosen as one of The Marker magazine’s 40 promising young people in 2015.

Avital Haitovich
Partner

Avital is a partner and leads the Blockchain and Digital Assets practice at Gornitzky GNY. Her main areas of expertise include fintech, digital assets, blockchain, anti-money laundering (AML) and combating the financing of terrorism (CFT), cyber protection, privacy and information security, mergers and acquisitions, and Internet and e-commerce.

Avital advises on a wide range of regulatory matters relating to fintech, blockchain, digital assets, cryptocurrencies, Web 3.0 projects, smart contracts, DAOs, and privacy, and leads licensing processes in the blockchain and fintech space, both locally and globally. She represents private and public companies, investment funds, entrepreneurs, and private investors from Israel and abroad in mergers and acquisitions and investment transactions in the fintech and blockchain sectors, and provides legal counseling on matters relating to the transfer of information and information security.

In 2026, Avital was selected for Globes’ 40 Under 40 list.

Innovation Before Legislation – The Gradual Regulation of Stablecoins in Israel

At the end of April 2026, Israel marked a notable milestone in the development of its digital assets’ framework- for the first time, the Capital Market, Insurance and Savings Authority (the “CMA”) approved the distribution of a shekel-pegged stablecoin by a licensed provider of financial asset services. The approval was granted on a limited basis, within a predefined scope, under close supervision and subject to strict conditions intended to protect customer funds and preserve operational stability. Although the approval itself was limited in scope, its legal and regulatory significance is much broader. It reflects a transition from abstract policy work on digital assets toward the practical supervision of stablecoin activity in Israel.

This development is of special importance because it occurred before the enactment of dedicated primary legislation governing stablecoin issuance, although, as discussed below, a legislative memorandum has since been published for public comments. Israel is therefore entering the stablecoin space in a manner that is both cautious and strategically significant- not through immediate comprehensive codification, but through a gradual regulatory process combining policy papers, government decisions, inter-agency allocation of powers, sandbox testing, supervised market entry, and now a concrete legislative proposal. In that sense, Israel’s stablecoin framework is being built through innovation before legislation, but not innovation without regulation.

Stablecoins are no longer a marginal or experimental subset of crypto markets. They have become one of the main operating infrastructures of the digital economy, supporting settlement, liquidity, payments, treasury management, and cross-border transfers. Against this global backdrop, the emergence of a supervised path for shekel-pegged stablecoin activity sends an important message – Israel does not intend merely to observe the next phase of digital money infrastructure, but to participate in shaping it within a regulated environment.

To understand the legal significance of this moment, however, it is necessary to trace the chronology of how stablecoin regulation has developed in Israel over the past several years.

The 2022 Ministry of Finance Team Report: Functional Regulation as the Starting Point

The modern Israeli regulatory discussion of stablecoins began within the broader effort to regulate digital assets as a whole. A central starting point was the 2022 report of the team established to examine the regulation of digital assets, led by the Chief Economist at the Ministry of Finance. This report, published in November 2022, adopted a functional regulatory approach, advocating for the principle that regulation should be determined by the actual economic function performed by the activity and the risks it generates. As articulated in the report, this approach aligns with the principle of “same activity, same risk, same regulation”. This principle was critical because it rejected the notion that digital assets should be regulated solely according to their technological form.

That approach had particular importance for stablecoins. The report recognized that digital assets could fulfill diverse roles – as a means of payment, a financial product, or an investment instrument. The report further highlighted that backed digital assets, which include stablecoins, carry the potential for significant risks to financial stability and monetary policy if widely adopted. Given these varied functions of digital assets and their potential systemic impacts, the report underscored the necessity of a dedicated regulatory framework for digital assets. This framework would involve a clear division of responsibilities among various financial regulators based on the nature of the activity and the risks involved. The report’s emphasis on functional regulation and risk-based supervision laid the groundwork for the multi-regulator model that Israel is now implementing.

This was an important conceptual shift. It meant that digital assets, and particularly stablecoins, were no longer to be treated merely as a niche or speculative phenomenon within the broader crypto landscape. Instead, they were recognized as posing a legal and regulatory challenge requiring a more refined framework due to their potential financial functions and systemic impact. The report laid the foundation for a multi-regulator model and for later decisions distinguishing between payment-related, investment-related, and systemically significant forms of digital asset activity.

Government Decision No. 204 of February 2023

The next major step came in February 2023, when the Israeli government adopted Government Decision No. 204 on the promotion of the regulation of activity in digital assets. This decision adopted the core logic of the Ministry of Finance team’s recommendations and instructed the relevant governmental authorities to advance legislative amendments, remove regulatory barriers, and formulate a comprehensive regulatory framework for digital assets.

Although Government Decision No. 204 did not definitively resolve the question of which regulator would have principal authority over stablecoins, it was nevertheless a turning point. For the first time, Israel adopted an express governmental policy that digital asset activity, including stablecoin-related activity, should be treated as part of the financial system and regulated through a dedicated framework.

This policy moved Israel toward a more strategic framework-building approach, signaling that the government was no longer merely tolerating digital asset activity at the edges of the financial system, but acknowledging that the sector required formal regulatory integration.

For stablecoins specifically, the decision was significant because it created the policy basis for immediate supervised activity alongside future legislation. That policy architecture remains visible today. Both the recent approval of a shekel-pegged stablecoin and the subsequent legislative memorandum were expressly framed as consistent with the principles set out in the government decision, enabling activity to begin even before the enactment of dedicated legislation.

The Bank of Israel’s February 2023 Principles Paper on Stablecoin Activity

Also in February 2023, another important milestone was reached with the Bank of Israel’s publication of its Principles Document for Stablecoin Activity for public comment. Whereas the Ministry of Finance report and the government decision addressed digital assets more broadly, the Bank of Israel’s document focused specifically on stablecoin activity and proposed substantive principles for the regulation of stablecoins that may serve mainly as a means of payment.

The paper sets out several core requirements for stablecoin activity. These include 100% reserve coverage, the holding of reserve assets in liquid assets with low risk, repayment at any time, separation of funds, consumer protections, and rules governing the technological infrastructure, including data security, cyber, and privacy protection requirements. The paper also emphasizes transparency through a white paper and full disclosure to customers regarding risks, fees, and reserve balances.

Just as importantly, the paper proposes parallel supervisory frameworks rather than a single-regulator model. Under the proposed structure, the CMA would license stablecoin issuers from the first shekel issued, while the Banking Supervision Department would license systemic issuers of stablecoins that serve, or may become, a common means of payment. At the same time, the Payment Systems Oversight Division at the Bank of Israel would oversee any stablecoin designated as a recognized payment system, with coordination mechanisms operating between the relevant regulators.

The December 2024 Finance Minister Decision: The CMA as Primary Regulator

A further central milestone came in December 2024, when the Minister of Finance determined that the CMA would serve as the primary regulator for the licensing, supervision, and regulation of entities engaged in the issuance and offering of stablecoins.

This decision did not create a purely centralized model. On the contrary, it effectively adopted a multi-regulatory framework. The CMA was designated as the lead authority for licensing and supervision of issuers, but the Bank of Israel retained authority with respect to systemically important stablecoins and payment-system and financial-stability aspects.

This institutional allocation is one of the most important features of the Israeli stablecoin model. It confirms that Israel has rejected the idea that all stablecoins should automatically be treated the same way under a single legal category. Instead, regulation depends on the token’s function, scale, use, and risk profile.

The April 2026 Approval: From Policy to Practical Supervision

Against this background, the April 2026 approval by the CMA should be understood as the first major practical implementation of the regulatory architecture that had been gradually built since 2022.

The approval itself was limited and should not be overstated as a wholesale market opening. It was granted in a defined and restricted format to a licensed financial asset service provider, after a dedicated review process and a roughly two-year pilot conducted in a sandbox environment.

The approval also emphasized several substantive safeguards – a full 1:1 backing ratio between issued tokens and reserve assets, the holding of reserve assets in Israel in dedicated and separate accounts, liquidity management, and redemption mechanisms available at all times.

These are not incidental details. They amount to a substantive statement of the legal expectations that now define Israel’s emerging stablecoin regime, as confirmed and formalized in the subsequent legislative memorandum.

The June 2026 Legislative Memorandum

At the end of June 2026, the legislative memorandum for the Law for the Supervision of Financial Services (Issuance of Stablecoins), 5786-2026, was released for public comments. Building on the Chief Economist’s report, Government Decision No. 204, and the December 2024 designation of the CMA as the responsible regulator, it proposes for the first time to anchor in primary legislation a comprehensive framework for stablecoin issuers, designed to balance the development of the sector against the prudent management of risks to the financial system, consumers, and businesses.

At its core, the memorandum rests on a small set of substantive principles that echo, and now formalize, those already applied in the April 2026 approval. The first is a comprehensive licensing and supervisory regime – no one may engage in the issuance or offering of stablecoins without a dedicated license from the CMA, which acts as the supervisor of issuers (the “Supervisor”), and applicants must satisfy demanding “fit and proper”, financial-soundness, and technological and cyber-resilience standards designed to keep illegitimate actors out and safeguard the integrity of the systems. Recognizing that the local market is relatively small, the memorandum also opens a route for adequately supervised foreign issuers to obtain a license, allowing the Supervisor to rely on home-jurisdiction regulation where it affords sufficient protection to customers.

The remaining principles protect the value of the coin and the position of its holders. Each coin must be fully backed, at a ratio of no less than 100%, by low-risk and liquid reserve assets (such as cash or short-term government bonds) and held separately from the issuer’s own assets. Every holder is guaranteed a fundamental right to redeem at the value of the reference asset, promptly and without fee, reinforced by a duty to publish a clear, Hebrew-language disclosure document at least 30 days before issuance. Issuers must also maintain sound corporate governance, including a board, a general manager, an external auditor, and an independent compliance officer, while being barred from paying interest, preserving the coin’s character as a means of payment rather than an investment product.

Finally, the memorandum suggests a concept of proportionality. Coins that reach meaningful monetary significance or could materially affect financial stability are to be designated “significant” and subjected to heightened oversight, with the Bank of Israel setting the relevant criteria in consultation with the Supervisor and addressing them in a separate memorandum. For coins pegged to a basket of assets, the framework draws explicitly on the Asset-Referenced Token model under the European Union’s MiCA regulation, situating the Israeli regime within the emerging international standard.

Although a final and binding statute remains some way off. Yet the absence of one should not obscure how far the Israeli framework has already progressed. Israel has moved from conceptual policy work to governmental endorsement, then to institutional allocation of powers, subsequently to practical supervised activity, and now to a concrete legislative proposal.

The memorandum formalizes this trajectory. It does not create stablecoin regulation from scratch. Rather, it consolidates and elevates into primary legislation a framework that had already begun to emerge through policy decisions, principles papers, and controlled supervisory action.

Israel Is Entering the Stablecoin Arena at the Right Time

From an international perspective, Israel’s timing may prove advantageous. Stablecoins are no longer an experimental niche but one of the central growth engines of the digital economy. The largest stablecoins already serve as real operating infrastructure for trading, liquidity, cross-border payments, and digital settlement. Their relevance is only growing as tokenization, digital payments, and blockchain-based financial services expand.

Against that backdrop, the possibility of issuing a regulated shekel-pegged stablecoin sends a clear signal to the market- Israel intends to be part of the next generation of digital money infrastructure rather than merely observe it from the sidelines.

This move also aligns well with broader international regulatory momentum, including developments in the European Union, United Kingdom and the United States. Israel is therefore not operating in a vacuum. It is converging with the direction of leading markets while creating its own distinct opportunity within a supervised, advanced, and innovation-friendly environment.

For foreign companies active in payments, fintech, and digital asset infrastructure, Israel now offers a compelling proposition – a jurisdiction that combines innovation-friendly policies with meaningful regulatory supervision, access to a technologically advanced ecosystem, and proximity to both European and Middle Eastern markets. With the regulatory framework still in its formative stages, this is an opportune moment for market participants to engage with Israeli regulators, shape emerging practices, and establish an early foothold in a jurisdiction that is positioning itself to become a significant hub for regulated stablecoin activity in the years ahead.