Israel’s biggest bank is ready to try crypto again — this time with stronger regulatory cover. Bank Leumi and Galaxy Digital announced they’ll integrate cryptocurrency trading into Leumi’s digital investment arm, Pepper, allowing customers to buy, hold and sell “selected digital assets,” including Bitcoin, Ether and Solana, inside the Leumi Trade capital markets app. Trading will take place in a dedicated, secured section of the app, and the service is expected to roll out in early 2027, pending final approval from the Bank of Israel. Why this attempt might stick where the last one failed Leumi first tried to enable BTC and ETH trading via Pepper Invest in March 2022 with Paxos, claiming to be the first Israeli bank to offer such a service. That plan never launched because it stalled at the regulator. The new effort pairs Leumi with Galaxy — a counterparty that now holds stronger U.S. regulatory credentials (a New York DFS BitLicense and a May 2026 money-transmission license) — and uses Galaxy’s institutional stack: execution through GalaxyOne Institutional and custody via GK8, an air-gapped wallet provider Galaxy acquired (GK8 never touches the internet). Regulatory groundwork has changed since 2022 A concrete reason this second push has momentum is a string of mid-2026 regulatory reforms in Israel: - The Bank of Israel removed automatic deposit delays and barred banks from blanket refusals of funds from licensed crypto providers. - The Capital Market Authority published wallet-security and capital requirements: minimum capital of 2 million NIS for non-custody firms and 2.5 million NIS for custody providers, plus mandatory segregation of customer assets. - An August 1 circular opened regulated trading to the top 50 coins by market capitalization (above a $500 million threshold), creating a clearer, lower-friction on-ramp for banks. What customers will see Customers will be able to trade digital assets from the same app they use for stocks and bonds. Leumi serves roughly 2.5 million retail customers, meaning this integration could materially broaden retail access to crypto in Israel once approved. Galaxy’s take “The future of finance will run on open, programmable rails, and we believe the banks that move first will define the era that follows,” said Lior Lamesh, CEO of Galaxy Israel. “Leumi is the first bank in Israel to bring digital assets to its customers, and it chose Galaxy, to make it possible.” Next steps and caveats Leumi and Galaxy expect the service to launch in early 2027 but still need Bank of Israel sign-off — the very gate that stopped the 2022 plan. If approved, the move would mark a significant step toward mainstream, bank-backed crypto access for Israeli retail customers under a clearer regulatory framework. Read more AI-generated news on: undefined/news