Bank Leumi, through its digital investment arm Pepper, is preparing to reintroduce cryptocurrency trading services in Israel, with an expected availability in early 2027. The bank has partnered with Galaxy Digital to provide the necessary trading and custody infrastructure, aiming to offer customers access to digital assets like Bitcoin, Ether, and Solana within its Leumi Trade application.
This planned relaunch follows a previous attempt by Pepper Invest in March 2022, which was halted due to regulatory hurdles. The current initiative is underpinned by significant regulatory shifts in Israel that have created a more permissive environment for financial institutions engaging with digital assets. In mid-2026, the Bank of Israel removed previous restrictions on crypto-linked deposits and the refusal of funds from licensed providers. Concurrently, the Capital Market Authority established wallet security and capital standards, requiring 2 million New Israeli Shekels for non-custody firms and 2.5 million New Israeli Shekels for custody firms, with mandatory customer-asset segregation.
Further regulatory clarity arrived with an August 1 circular, which expanded the scope of tradable digital assets. The circular permits trading in the top 50 cryptocurrencies by market capitalization, provided they exceed a $500 million threshold. This framework is seen as creating a regulated, lower-friction pathway for banks like Leumi to offer crypto services directly to their retail customers.
The partnership with Galaxy Digital is central to Bank Leumi’s strategy. Galaxy Digital, which holds a New York DFS BitLicense and a money-transmission license obtained in May 2026, will supply the technological backbone for the service. Execution of trades will be managed through GalaxyOne Institutional, Galaxy Digital’s platform designed for banks and asset managers. Custody solutions will be provided by GK8, a provider of air-gapped wallet technology.
Bank Leumi, which serves approximately 2.5 million retail customers, aims to integrate cryptocurrency trading into its existing Leumi Trade application, where customers already manage stocks and bonds. This integration is intended to offer a seamless experience for users.
While the service is expected to become available in early 2027, the exact launch date remains contingent on final regulatory sign-off from the Bank of Israel. The previous attempt’s stall serves as a reminder of the critical role regulatory approval plays in the rollout of such services. The current regulatory framework, however, suggests a more streamlined path forward for institutions like Bank Leumi.
Why This Matters
Bank Leumi’s planned cryptocurrency trading service, expected in early 2027, signifies a potential shift in traditional banking’s approach to digital assets in Israel, following a period of regulatory uncertainty. The service will offer Bitcoin, Ether, and Solana within its Leumi Trade application, enabled by a partnership with Galaxy Digital and new regulations.
Broader Context
Up until mid-2026, Israeli banks faced restrictions on crypto-linked deposits and could refuse fiat from crypto sources. New regulations implemented by the Bank of Israel and the Capital Market Authority have since created a more permissive environment, establishing standards for crypto custody and allowing trading in the top 50 coins by market cap above a $500 million threshold. This has paved the way for institutions like Bank Leumi to offer crypto services.
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