Israel Discount Bank to Let Customers Trade Bitcoin in App Starting Nov. 26
Israel Discount Bank announced Wednesday it will allow eligible customers to buy, hold and sell bitcoin and ether directly in its mobile app starting November 26, potentially beating larger rival Bank Leumi to become the first Israeli bank to offer such services.
The Tel Aviv-listed lender described the service as a first for Israel's banking system in a November 11 statement. Customers will be able to trade the two digital assets alongside stocks and bonds without opening an account at an outside exchange or managing a separate digital wallet.
The offer is limited to private customers who are Israeli residents, 18 or older, and whose accounts are already set up for securities trading, subject to the bank's terms. The service will be available through the bank's mobile application, providing a streamlined experience for cryptocurrency trading.
For the first time in the banking system, Discount Bank will allow trading in digital currencies directly from the bank account in a simple and secure manner, without the need for complex dedicated digital wallets.
Commission and Wallet Restrictions
The bank's product page lists a 2% commission on purchases and sales in the app, not including any foreign-exchange conversion. Custody fees are waived for six months from the launch date and then run 0.25% per quarter. Trading is open Sunday through Friday from 9 a.m. to 11 p.m. Israel time, with only immediate orders allowed.
Customers can buy as little as 0.01 of a coin. Holdings appear in the securities portfolio immediately, with cash settling the next business day in U.S. dollars. Conversion into Israeli shekels happens only if the customer requests it. The service is currently a closed system, meaning Bitcoin and ether bought through Discount cannot be sent to an outside wallet, and coins held elsewhere cannot be transferred in.
The bank warns customers about the unusual risks, high volatility, and possibility of total loss associated with cryptocurrencies. It clarifies that the coins are not legal tender and lack the same protections as traditional securities.
Tax Advantages
Besides convenience, Discount Bank is offering favorable tax treatment. Capital gains and losses on the coins can be automatically offset against the customer's investment portfolio for tax withheld at source, at a 25% rate on profits. Sale proceeds land directly in the customer's bank account, avoiding the source-of-funds questionnaires that have often accompanied money coming back from crypto platforms.
Competition and Regulatory Context
Discount is not the first Israeli bank to promise bitcoin trading. Bank Leumi, the country's largest lender, announced a plan in March 2022 to offer bitcoin and ether through Pepper Invest with Paxos, though this project did not reach a full-scale launch. In August, Leumi and Galaxy Digital announced that Leumi and Pepper customers would be able to buy, hold and sell bitcoin, ether and Solana in the Leumi Trade app, with a launch expected in early 2027.
Leumi's announcement billed it as the first bank in Israel to offer the service. If Discount opens on November 26, it would get there first, though Leumi still plans to offer Solana, which Discount is not including at the start. Discount said it may later consider adding other assets.
In an October 7 circular, the Bank of Israel's Banking Supervision Department amended Directive 411 to state that a bank may not refuse payment services solely because the funds come from virtual-currency activity, a change that takes effect May 1, 2027. The amendment does not authorize banks to offer crypto trading but is part of a broader effort to widen how banks handle crypto-related payments.
Related
