Bank Leumi, Israel's largest financial institution, is launching Bitcoin trading services in partnership with Galaxy Digital. The bank first signaled interest in crypto trading back in 2022, but regulatory and compliance hurdles delayed the rollout for years.
This marks a watershed moment for institutional Bitcoin adoption in the Middle East. Bank Leumi commands roughly 35 percent of Israel's banking sector assets, giving the move outsized weight in regional finance. Galaxy Digital, the crypto-focused merchant bank led by Mike Novogratz, serves as the technology and infrastructure partner for the trading operations.
The partnership follows Israel's gradual warming to digital assets after years of regulatory ambiguity. The Bank of Israel has been tightening rules around crypto exchanges and custody, but institutional banking entry represents tacit acceptance that Bitcoin belongs in mainstream financial services. Leumi's move contrasts sharply with traditional banks in North America and Europe, which remain skittish about crypto trading desks despite growing institutional demand.
Galaxy Digital brings substantial operational experience to the arrangement. The firm operates its own trading desks, OTC operations, and asset management services. For Leumi, outsourcing to Galaxy lets the bank offer Bitcoin exposure without building a full internal trading infrastructure from scratch, reducing compliance risks and operational complexity.
The timing reflects broader momentum in institutional Bitcoin adoption. ETFs tracking Bitcoin have attracted billions in inflows from institutional investors across multiple jurisdictions. Bank Leumi's entry signals that traditional deposit-taking institutions are ready to compete for crypto-native capital and offer services to clients holding digital assets.
Regulatory approval from Israeli authorities validates the framework. This paves the way for other Israeli banks to follow suit. Galaxy Digital gains distribution through one of the region's most trusted financial brands, expanding its reach beyond crypto-native platforms and hedge funds.