Bitcoin Is Coming to Israel’s Largest Bank: Bank Leumi Opens Crypto Trading to 2.5 Million Customers

Israel’s largest bank is moving into Bitcoin. On August 14, 2026, Bank Leumi announced a partnership with Nasdaq-listed Galaxy Digital. The deal will let Leumi customers buy, hold, and sell digital assets inside the bank’s own systems. Notably, the service covers Bitcoin, Ether, and Solana at launch. Leumi expects to go live in early 2027.

The timing is not accidental. Israeli regulators spent the summer of 2026 rewriting the rules for digital assets. As a result, a project that failed in 2022 now has a viable path forward.

Bank Leumi, Israel’s largest bank, is partnering with Galaxy to become the first bank in Israel to offer digital asset trading.

Customers of @LeumiDigital and Pepper, the bank’s mobile digital banking arm, will be able to buy, hold, and sell BTC, ETH, and SOL directly in the… pic.twitter.com/LxjqbqgwJq

— Galaxy (@galaxyhq) August 14, 2026

What Bank Leumi Actually Announced

Leumi will add a dedicated, secured section to its Leumi Trade capital markets application. Customers will trade digital assets alongside stocks and bonds in one interface. Additionally, coverage of the announcement points to Leumi’s Pepper mobile app as a second distribution channel. The bank will own the customer relationship throughout, rather than handing users off to a third-party exchange.

Leumi will also handle tax compliance on behalf of its customers. That detail matters more than it first appears. Israeli crypto gains face a 25% capital gains rate, plus a 3% surtax for high earners. Meanwhile, reporting those gains has long fallen entirely on the individual. Consequently, bank-managed tax handling removes a genuine friction point for retail investors.

Maya Ravia, Head of Strategy at Bank Leumi, framed the move as a service expansion. “We are constantly working to expand the range of advanced financial services that the bank offers its customers,” she said.

The 2022 Attempt That Regulators Blocked

Leumi tried this before. In 2022, the bank partnered with Paxos to launch Bitcoin and Ether trading. However, the Bank of Israel declined to approve the service. Leumi shelved the project entirely.

That rejection reflected the broader posture of Israeli banking at the time. Banks routinely refused or delayed deposits traced back to crypto activity. In fact, customers sued over it. A district court once ordered Bank Hapoalim to accept a deposit derived from Bitcoin sales. Another Hapoalim client reported a blocked $195,000 transfer from a European trading platform. Banks cited money laundering and terrorism financing risk in each case.

Israel Rewrote Its Crypto Rules This Summer

The regulatory picture changed quickly in mid-2026. In July, the Bank of Israel removed automatic delays on crypto-linked deposits above NIS 100,000. The central bank also drafted a directive barring blanket refusals of fiat deposits sourced from licensed providers. Under that approach, funds routed through a supervised entity count as lower risk.

The Capital Market Authority moved next. It issued mandatory security standards for digital wallets and set capital requirements for service providers. Firms offering crypto services without custody must hold NIS 2 million in equity. Firms that also custody client assets must hold NIS 2.5 million. Importantly, the rules require full separation between customer assets and company assets.

On August 1, 2026, a new circular defined which digital assets licensed firms can trade. The list expanded from roughly eight or nine currencies to the top 50 by market capitalization. A $500 million minimum market cap threshold now applies. Eli Tobul, Senior Deputy Commissioner, described the goal as a transparent framework that protects the public while letting the market develop. Separately, the Israel Securities Authority issued guidance in June 2026 on when a token qualifies as a security.

Why Galaxy and GK8 Anchor the Deal

Galaxy will supply the trading and custody infrastructure behind the service. Trading runs through GalaxyOne Institutional, the firm’s platform for banks and asset managers. Custody runs on Galaxy’s Custody Infrastructure platform, formerly known as GK8.

GK8 has deep Israeli roots. Lior Lamesh and Shahar Shamai founded the company in Tel Aviv in July 2018. Both built their cybersecurity expertise inside elite units of the Israeli Prime Minister’s Office. Celsius acquired GK8 for $115 million in November 2021. After Celsius collapsed, Galaxy bought the platform out of bankruptcy for roughly $44 million in February 2023. Lamesh and Shamai still lead the custody business today.

Lamesh, now CEO of Galaxy Israel, tied the deal to a broader shift. “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 said. Galaxy currently oversees approximately $9 billion in client assets.

The Scale Behind the Move

Leumi is not a small player testing a side product. The bank reported NIS 903.9 billion in total assets as of Q1 2026, up 18.3% year over year. In Q2 2026, it posted net income of roughly $940 million and a 16.3% return on equity. Furthermore, the bank operates without a controlling shareholder and traces its history back more than 120 years.

Roughly 2.5 million retail customers would gain access to the service. That figure lands against a domestic market where more than 25% of the population has already touched crypto. In other words, demand exists. What has been missing is a regulated onramp inside the banking system itself.

Where This Fits Globally

Leumi joins a widening group of banks building digital asset products in 2026. Deutsche Bank is targeting a crypto custody launch this year, working with Bitpanda’s technology arm and Swiss provider Taurus. Germany’s Sparkassen network plans retail crypto trading through its securities arm DekaBank. Standard Chartered, meanwhile, secured a MiCA license for institutional Bitcoin and Ether custody. Citi, HSBC, BNY Mellon, and State Street are each expanding custody or tokenization services.

The common thread is regulatory clarity rather than price action. Europe’s MiCA framework gave banks a rulebook to build against. Israel’s summer 2026 reforms serve a similar function domestically. Notably, the Capital Market Authority explicitly aligned its approach with New York’s NYDFS standards and MiCA.

What Still Needs to Happen

Final sign-off from the Bank of Israel remains pending. That approval is the same hurdle that stopped the Paxos deal in 2022. However, the underlying framework has changed substantially since then. Licensed VASPs also face a six-month compliance window that runs into early 2027, matching Leumi’s target launch.

Several practical details remain undisclosed. Fees, withdrawal options, and whether customers can move assets to self-custody are all unresolved. Those mechanics will determine whether the product serves as a real gateway or a closed sandbox. Investors should watch for that clarity before the launch window.

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