In March 2022, Bank Leumi's Pepper Invest announced a partnership with Paxos to let customers trade Bitcoin and Ethereum, rushing to claim the title of "Israel's first bank to offer crypto services." That service never actually launched — not because of technical issues, but because the Bank of Israel never gave its blessing.
Five years later, the same bank is back with the same goal, just a different partner. Bank Leumi and Galaxy Digital announced Thursday that customers will be able to buy and sell Bitcoin, Ethereum, and Solana through Leumi Trade, the bank's capital markets app, with trades executed in a separate, encrypted section within the app. The target launch is early 2027. Users won't need to download a separate app — everything happens inside the same interface they already use for managing stocks and bonds. Bank Leumi is Israel's largest bank, and Leumi Trade's user base sits at roughly 2.5 million people.
What's different this time isn't Bank Leumi's ambition — it's that the regulatory foundation has shifted. Until mid-2026, Israeli banks automatically delayed deposits linked to crypto and could outright refuse fiat originating from crypto sources; licensed operators were restricted to trading a very short list of coins, with no clear rules on custody or capital requirements. That environment started loosening in mid-2026: the Bank of Israel scrapped the deposit-delay mechanism and banned blanket refusals of funds from licensed operators, while the Israel Securities Authority set wallet security standards and capital thresholds — NIS 2 million for non-custodial firms, NIS 2.5 million for those handling custody, with mandatory segregation of client assets from company assets. A circular that took effect August 1 further expanded the list of tradable coins to include the top 50 cryptocurrencies by market cap, provided they exceed a $500 million threshold. In other words, banks now have a lower-friction path with clearer regulatory boundaries to bring crypto trading directly to retail customers — conditions that simply didn't exist during the 2022 attempt.
Galaxy isn't showing up empty-handed either. The company holds a BitLicense from New York's Department of Financial Services (DFS), and in May 2026 it secured a money transmitter license, effectively clearing the regulatory bar in advance. The technical setup has two parts: trade execution runs through GalaxyOne Institutional, Galaxy's platform built specifically for banks and asset managers, while custody is handled by GK8 — a company specializing in air-gapped wallets (hardware that never touches the internet), which Galaxy acquired following Celsius's collapse. Galaxy Israel CEO Lior Lamesh put it this way: "The future of finance will be built on open, programmable rails, and the banks that move first will define the next era." He specifically called out Bank Leumi as the first Israeli bank to bring digital assets to customers — and it chose Galaxy.
But the part of this story worth remembering most is the final step: the entire plan still needs approval from the Bank of Israel — the exact same checkpoint that killed the Paxos partnership back in 2022. The regulatory environment is undeniably looser than it was three years ago, but final approval still isn't up to Bank Leumi or Galaxy to decide. Whether the early 2027 launch actually happens on schedule won't be confirmed until the central bank gives its nod.
