According to a Reuters report, Leumi, the biggest banking institution in Israel, has enabled crypto trading. The first bank in this country to provide its users access to this nascent asset class, clients will be able to trade Bitcoin, Ethereum.
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In order to provide the service, Reuters said, the bank will use its digital platform Pepper Invest. The financial institution has entered into a partnership with Paxos, the U.S.-based regulated blockchain company.
At the moment, the bank’s customer can only buy, sell, and hold Bitcoin and Ethereum with transactions of $15.49, as a minimum. Reuters quoted the following source on the additional advantages of using this service:
Pepper will collect tax according to the guidelines of the Israeli Tax Authority so that customers will not need to manage tax complexities.
The service is currently pending approval from the Israeli regulator. Therefore, the bank is yet to provide an official launching date for the product.
According to the report, Leumi is launching the service to remove friction from the process of trading crypto. Including the need for users to download and maintain a digital wallet.
This suggests users won’t hold the private keys to their Bitcoin and Ethereum and could be ceding too much power to the financial institution. The bank could determine when and why a user could be locked out of their funds.
Thus, this new service seems less efficient than actually holding Bitcoin and Ethereum on a digital wallet controlled by the user.
However, as seen below, the bank’s Pepper app would allow users to invest in digital assets, and in public company stocks. Much like Robinhood, the TradeFi U.S. app with offers similar features, users can purchase Apple, Amazon, and other equities.
Crypto To Enter The Israel Mainstream
A separate report from Globes indicates the Israeli bank chose Paxos because it’s subject to a high level of scrutiny from U.S. authorities. The company holds several licenses to operate with Bitcoin, altcoins, and blockchain technology.
Since its foundation in 2021, the company has managed to consolidate important partnerships with PayPal, Revolut, and the Bank of America, Globes said. Paxos has over $20 billion in assets under management.
Uri Natan, CEO of Pepper, told Globes the following on their recent cooperation with Leumi:
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 tax authorities. This is a game changer that has opened a window for our clients into the next world of investments and the future of banking.
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At the time of writing, Bitcoin trades at $44,400 with a 1.4% profit in the last 24-hours.