Israel Discount Bank to Launch Crypto Trading Services in Mobile App

Israel Discount Bank to Enable Cryptocurrency Trading

Israel Discount Bank has unveiled its intention to allow customers to trade Bitcoin and Ether directly through its mobile application starting November 26. This development aims to integrate cryptocurrency transactions seamlessly with traditional banking services, enabling clients to buy, hold, and sell digital currencies alongside stocks and bonds.

According to a report by Globes on November 11, this innovative service will eliminate the need for customers to manage external exchange accounts or digital wallets, as all transactions will be conducted within the bank’s mobile platform.

Service Details and Security Measures

The service is set to be accessible exclusively to individual clients aged 18 and older who have securities trading activation on their accounts, aligned with the bank’s enrollment agreements as detailed in The Jerusalem Post. Digital assets will be securely stored in bank-managed wallets, utilizing Fireblocks technology for enhanced security. Proceeds from cryptocurrency sales will be directly credited to the customer’s bank account, simplifying the process of managing digital investments.

Leadership and Risk Awareness

Elad Fisher, who heads the Financial Markets Division at Israel Discount Bank, spearheaded this initiative. The bank's CEO, Avi Levi, emphasized the importance of this offering as a foundational step towards advancing the bank’s capabilities in the digital currency sphere. He noted that users would benefit from the ability to perform trades without navigating complex digital wallet systems.

However, the bank has also warned its clients about the inherent risks associated with cryptocurrency trading, such as volatility and the potential for total investment loss.

Promotional Offers and Tax Handling

For the first six months, Discount Bank will waive account management fees for users engaging in cryptocurrency transactions. Although the bank has stated that trading commissions will be relatively low, specific rates were not disclosed at this time. A notable feature of this service will be integrated tax handling, allowing capital gains and losses from crypto investments to offset other taxable events within the customer’s investment portfolio, which is a significant advantage compared to independent external platforms.

Challenges in Traditional Banking

Israelis have encountered challenges in depositing cryptocurrency proceeds into traditional banking systems, as banks often demand proof of the origin of funds to comply with anti-money laundering regulations. The Israel Tax Authority has acknowledged such complications, offering a channel for tax payments on crypto profits even when a bank has refused the corresponding funds. To qualify, customers must demonstrate that the initial purchase was made using legal funds without alternative sources for tax payments.

Competitive Landscape

In a related context, Bank Leumi announced in August a partnership with Galaxy to provide trading services for cryptocurrencies including Bitcoin, Ether, and Solana through its platform, with a rollout anticipated in early 2027. Notably, the announcement from Discount Bank positions it to potentially launch its services ahead of competitors if it adheres to its timeline.

Moreover, local firm Bits of Gold operates under regulatory oversight from Israel’s Capital Market, Insurance and Savings Authority and has secured a license for its stablecoin operations. Outside of Israel, Deutsche Bank has initiated a crypto custody service catering to institutional and corporate clients in Europe, further illustrating the growing engagement of established financial institutions in the realm of digital assets.