Bank Leumi Partners with Galaxy Digital for Cryptocurrency Trading
In an ambitious move within the financial landscape of Israel, Bank Leumi, the nation’s largest banking institution, has partnered with Galaxy Digital to launch cryptocurrency trading via its mobile banking platform, Pepper. According to a press statement released on Thursday, customers using both Leumi and the Pepper app will soon have the ability to buy, hold, and trade prominent digital currencies, including Bitcoin, Ethereum, and Solana, all within a secure segment of the Leumi Trade capital markets application. This innovative service is slated to become accessible to users in early 2027.
Previous Attempts and Regulatory Challenges
This is not Bank Leumi’s first attempt to introduce crypto trading; in March 2022, Pepper Invest announced a partnership with Paxos in a bid to offer Bitcoin and Ethereum trading, claiming to be the first bank in Israel to do so. However, the initiative was ultimately thwarted due to the lack of regulatory approval at that time. Plans to proceed with such services have faced delays, particularly due to constraints from the Bank of Israel.
Historically, Israeli financial institutions were hesitant to accept cryptocurrency transactions. Until mid-2026, banks routinely postponed deposits connected to cryptocurrencies and had the authority to deny funds originating from crypto platforms. Licensed crypto firms were restricted to trading a limited selection of coins without clear regulations regarding capital requirements or custody.
This scenario began to change when the Bank of Israel ceased the automatic delays on deposits and prohibited blanket refusals from licensed crypto providers in the summer of 2026. Additionally, the Capital Market Authority established security and capital standards with specific requirements, such as mandated asset segregation for customer funds. Following new regulations issued on August 1, trading was opened up for the leading 50 cryptocurrencies that have a market capitalization exceeding $500 million, creating a pathway for banks, including Leumi, to sell crypto products to individual clients more seamlessly.
Galaxy Digital’s Role and Future Outlook
Galaxy Digital adds further legitimacy to this venture as it holds a BitLicense from the New York Department of Financial Services and a money transmission license granted in May 2026, making it a viable regulatory partner for Leumi. Galaxy will manage the execution of trades through its GalaxyOne Institutional platform, specifically designed for financial institutions, while GK8, a company specializing in creating air-gapped wallets, will ensure secure custody of digital assets.
With approximately 2.5 million retail clients, Bank Leumi aims to provide these users with the ability to trade cryptocurrencies via the same application they use for managing traditional investments such as stocks and bonds. Lior Lamesh, the CEO of Galaxy Israel, stated:
“The future of finance will run on open, programmable rails, and we believe the banks that move first will define the era that follows.”
He emphasized that Leumi has taken a pioneering step by integrating digital assets into its services, partnering with Galaxy to realize this vision. The rollout of this service is pending the green light from the Bank of Israel, echoing the challenges faced during the initial 2022 proposal.
