- Bank Leumi will offer Bitcoin, Ether and Solana trading to retail clients.
- Galaxy Digital provides execution, while GK8 handles custody.
- The bank will calculate and withhold crypto taxes for customers.
- Launch is set for early 2027 and still needs Bank of Israel sign-off.
Bank Leumi, the largest commercial bank in Israel, has signed a partnership with Nasdaq-listed Galaxy Digital that will let its 2.5 million retail clients buy, hold and sell cryptocurrency inside the bank’s own applications, with a launch targeted for early 2027 and final approval from the Bank of Israel still outstanding. At launch the offering covers three assets: Bitcoin, Ether and Solana. It arrives four years after the same bank tried the same thing and was stopped.
The 2022 attempt failed for a reason that no longer exists
In March 2022 Leumi announced a crypto trading desk built with Paxos and became, briefly, the first Israeli bank to promise retail access to digital assets. Regulators shut it down. The problem was not the technology or the counterparty but the absence of any written rulebook telling a supervised bank how to hold customer crypto, how to treat deposits coming back from an exchange, or how much capital to set aside against the risk. Compliance departments at banks do not act in the absence of rules. They act when rules exist, even strict ones, because a strict rule is something an auditor can be shown.
That rulebook was written over the summer of 2026. The Bank of Israel published draft directives that ease how banks treat money arriving from licensed crypto service providers, which removes the single largest friction point Israeli customers have complained about for years, namely deposits from exchanges being frozen or rejected outright. Separately, the Capital Market Authority split its capital floors by function. A firm that never touches customer assets needs NIS 2 million in equity, one that offers custody needs NIS 2.5 million, and custodians hold an extra 0.25% of the total value of assets they keep. That equity cannot sit in crypto, only in cash, deposits or short-term government bonds. Those numbers are demanding for a startup custodian. For a bank partnering with a Nasdaq-listed counterparty, they are a checklist item.
The bank will withhold your crypto tax so you do not have to file it
Nothing in this deal gives Leumi clients better pricing than they would get on a global exchange. The bank is not competing on spread. It is competing on the parts of crypto ownership that retail investors consistently find unpleasant: opening an account with a foreign entity, passing a separate KYC process, moving shekels across borders, storing a seed phrase, and then reconstructing a year of transactions for the Israel Tax Authority.
The tax piece is the sharpest part of the offer. Israeli crypto investors currently calculate their own capital gains, track cost basis across venues, and file accordingly. Leumi will withhold at source. For a client with a handful of trades per year, that alone can justify accepting a worse fill price, and the bank clearly knows it.
Maya Ravia, Leumi’s Head of Strategy, framed the move as a response to digital assets becoming an increasingly integral part of the global financial system. Read commercially, the statement describes a deposit-retention strategy. Money that leaves a bank for an exchange stops generating fee income and stops being visible.
Domestic exchanges lose the only advantage they had
Domestic exchanges and brokers lose their main structural advantage, which was never product quality but shekel banking access. Once the country’s largest bank sells the same three assets inside an app that 2.5 million people already have installed, the smaller venues have to compete on asset breadth, staking, or fees, and none of those are easy to defend against a balance sheet of that size. Expect Hapoalim and Discount to respond, because a bank that offers crypto and a bank that does not are visibly different products to a 30-year-old customer.
The same rulebook explains why Galaxy could win this mandate at all. Israeli firms may only use foreign custodians operating under recognised regimes such as the UK’s FCA or the EU’s MiCA framework, and responsibility stays with the Israeli entity, which must monitor the assets daily and disclose to customers exactly who holds them and under which law. GK8 being Israeli-founded and Galaxy-owned puts the arrangement on the right side of that line without Leumi having to build custody itself.
There is also a supply-side consequence that gets less attention. That still means client assets sit with a foreign parent under an Israeli technical stack, and the Capital Market Authority’s 0.25% charge applies to the value of assets actually held in custody and rises as that balance grows. If Leumi clients allocate meaningfully, that charge grows in absolute terms, which is exactly the sort of detail that shapes whether the bank pushes the product hard or keeps it as a defensive checkbox.
Galaxy has not disclosed revenue-sharing terms, and Leumi has not published the fee schedule clients will pay per trade. Those two numbers will tell more about how serious this is than the announcement itself, and neither is expected before the product enters testing.