- Bank Leumi will allow its users to trade Bitcoin and Ethereum through its digital arm Pepper Invest.
- The banking giant is awaiting a regulatory nod following which it will offer its crypto services in partnership with U.S. blockchain firm Paxos.
Over the last year, traditional banking institutions have been closer to crypto than ever before. Citing competition from crypto-based exchanges, banking players have also started offering crypto trading services.
On Thursday, March 24, Israeli banking giant Bank Leumi becomes the first bank in the country to announce crypto trading services. The bank has partnered with the U.S. blockchain firm Paxos and will facilitate crypto trading through its digital arm Pepper Invest.
Leumi said that users of Pepper Invest will be able to buy, sell, and hold digital assets worth at least 50 shekels (or USD $16) per transaction. But currently, the service allows trading in only two digital assets – Bitcoin and Ethereum.
However, the regulator approval for the same is still pending. But Bank Leumi is ready to start the crypto trading service soon after it receives the regulatory nod. Apart from simplifying crypto trading services for its customers, Pepper Invest will manage the tax complexities and also collect taxes as per the rules of the Israel Tax Authority. Furthermore, customers can avail this service without downloading the digital wallet. Bank Leumi’s official statement reads:
The simple sale procedure is a significant innovation in relation to the existing difficulty in converting cryptocurrencies to money available in the current account, using the tools currently available.
Israel and crypto rules
As per the Israel Tax Authority, the use of digital assets in Israel is subject to taxation and is considered a means of virtual payment. However, facilitating Bitcoin and Ethereum trading by one of Israel’s top banks can be considered as the beginning of crypto adoption. Speaking of the latest development, Uri Natan, CEO of Pepper, on pioneering crypto trading in Israel, said:
We are proud to be the first in the banking system in Israel, and one of the few in the world, to offer our customers to trade cryptocurrencies in a simple, safe and reliable way, without having to download a wallet, and without having to deal with the tax authorities.
On the other hand, Israel’s central bank has been working on launching its own central bank digital currency (CBDC). Interestingly, the Bank of Israel is looking to launch Digital Shekel on the Ethereum blockchain network.
Nothing is final as of now as the central bank is just experimenting with the CBDC. The CBDC project manager at the Bank of Israel Yoav Soffer stated:
We did a trial with Ethereum technology, not because we think that that’s necessarily the technology we’ll use, but because it was a technology that was available for us to get our hands dirty with, in order to understand its advantages and disadvantages.
Bank of Israel hasn’t declared any final date on the launch of the CBDC.