Israel’s Oldest Bank Bets Big on Bitcoin, Ether and Solana Trading

Israel’s largest and oldest commercialized slope unveiled the woody this week with Galaxy Digital Inc., the Nasdaq-listed crypto steadfast led by Mike Novogratz. The motorboat people is aboriginal 2027, but the Bank of Israel inactive holds the termination switch.

Leumi and its mobile banking arm, PEPPER, would spot the work successful a sealed-off conception of the Leumi Trade concern app. Customers could buy, hold, and merchantability selected crypto assets too acquainted products, including stocks and bonds.

That setup strips distant the accustomed crypto obstacle course. Customers would not request accounts astatine standalone exchanges oregon idiosyncratic wallets, which clasp the credentials needed to power integer assets.

A Bank-Controlled Path Into Crypto

Galaxy volition proviso the trading and custody machinery down the projected service. Custody is the unglamorous but captious concern of protecting assets and the backstage keys that determination them.

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Trading would tally done Galaxy’s organization arm, a level made for banks and ample concern firms. Leumi besides plans to deploy Galaxy’s custody infrastructure, formerly GK8, nether a white-label arrangement. Put plainly, Leumi would tally the strategy nether its ain sanction alternatively than manus clients to an extracurricular speech oregon custodian.

That favoritism is the full point: customers would look their bank, not different crypto intermediary. Leumi besides expects to grip taxation reporting nether Israeli Tax Authority rules, though fees, trading limits, and the implicit database of eligible assets stay undisclosed.

The work is not a self-custody crypto wallet. Customers would not clasp their backstage keys. The statement works similar a accepted brokerage account, wherever an instauration holds securities for a client. It offers convenience, but it besides puts customers wrong the bank’s systems and rules. Crypto held successful custody does not transportation the aforesaid deposit security extortion arsenic shekel deposits.

A Second Attempt Under New Rules

Leumi tried this play before. In 2022, it announced a planned Paxos partnership for crypto trading done Pepper Invest. The task ne'er reached customers due to the fact that the Bank of Israel withheld regulatory clearance.

The backdrop has shifted. In mid-2026, Israel’s banking supervisors precocious draught rules that would dainty immoderate transfers from licensed virtual plus work providers arsenic little risk, alternatively of automatically flagging larger transfers for heightened scrutiny.

Israel’s Capital Market, Insurance and Savings Authority, also tightened the screws connected licensed crypto firms. The projected model includes superior requirements, lawsuit plus separation, and cybersecurity rules. Draft standards for public-facing tokens favour larger, established assets that conscionable market-value, decentralization, and international-recognition tests.

Those changes could marque banks little acrophobic of crypto on-ramps and off-ramps, the pipes that determination wealth betwixt the banking strategy and integer plus markets.

What looked intolerable 4 years agone is present being tested arsenic a regulated slope product, with hazard controls and taxation reporting replacing the freewheeling speech exemplary that kept customers and compliance officers connected the sidelines.

Security and Competition Take Center Stage

Galaxy bought Israel-founded GK8 successful 2023 for astir $44 cardinal from Celsius Network’s bankruptcy proceedings. GK8’s systems support key-signing functions distant from internet-connected systems, shrinking the distant onslaught aboveground that has repeatedly haunted crypto firms.

The level besides uses multi-party controls, truthful transactions tin necessitate much than 1 support and tin beryllium boxed successful by preset rules. For a bank, those controls whitethorn fulfill compliance and information demands that transcend the standards of a emblematic retail crypto platform.

Leumi is making this determination successful a state already saturated with crypto interest. More than 25% of Israelis person held oregon utilized integer assets successful caller years, according to manufacture estimates. Chainalysis information showed Israel received an estimated $22 cardinal successful onchain crypto worth successful the 12 months ending June 2025.

The projected work could unit the manus of different large Israeli banks, including Bank Hapoalim, Mizrahi-Tefahot, and Bank Discount, nary of which had publically announced comparable retail trading offerings by mid-August.

For now, Leumi’s program is simply a proposal, not a unrecorded product. The unit points are the Bank of Israel’s decision, the last plus list, fees, external-wallet withdrawal rules, and the lawsuit acquisition required earlier the planned aboriginal 2027 launch.