Bank Leumi, founded in 1902, is blazing a trail through the Israeli cryptocurrency landscape through a partnership with American firm Paxos.
Pending approval from Israel’s regulators, Leumi’s digital investment arm, Pepper Invest, is partnering with blockchain infrastructure company Paxos to provide customers the facility to buy, hold and sell Bitcoin and Ethereum for fees beginning at 50 shekels (approx. $15.50). Pepper Invest will collect taxes on cryptocurrency trades according to guidelines set forth by the Israeli Tax Authority, relieving customers of the burden.
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While multiple cryptocurrency platforms exist globally, banks are relative newcomers to the space. “We are proud to be the first in the Israeli banking system and one of the few worldwide to offer our customers to trade in cryptocurrencies simply, safely, and reliably, without the need to download a crypto wallet and will all tax complexities being resolved by the bank. This step is a game-changer and offers our customers a bridge to the new era of investments and to the future of banking,” said the CEO of Pepper Invest, Uri Nathan.
Bank Leumi will make cryptocurrency available to all customers in the near future. In the meantime, Pepper Investment customers will be able to access Hebrew applications on both the Android and Apple App stores.
Pepper Invest joins a burgeoning Israeli cryptocurrency market consisting of several crypto agencies, including Binance, whose trades were recently stopped to beef up the regulatory environment. Paxos will bring safe, regulated digital asset solutions to Pepper Invest’s new product.
Does anyone notice the irony?
There is an element of irony in centralized institutions offering cryptocurrencies designed to circumvent traditional financial institutions. Banks have historically helped governments regulate the flow of money in countries by accepting deposits and lending money to other clients. Their approach is two-faceted, experimenting with cryptocurrencies while petitioning regulators to create guidelines in their favor. Some offer crypto investments to affluent customers, others like JPMorgan starting its own digital currency JPM Coin in 2019.
Crypto custody services booming
Gunjan Kedia, the vice-chairperson of U.S. Bank’s wealth management and investment services division, said in October last year, “Our clients are getting very serious about the potential of cryptocurrency as a diversified asset class. I don’t believe there’s a single asset manager that isn’t thinking about it right now.” U.S. Bank began offering crypto custody services for fund managers in later 2021, joining the likes of Bank of New York Mellon and Northern Trust.
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