Banks Quietly Integrate Crypto Trading Infrastructure

Israel's largest bank, Bank Leumi, has partnered with Galaxy Digital to allow its 2.5 million retail customers to buy, sell, and hold BTC, ETH, and SOL directly within the bank's own app, Leumi Trade. The partnership is set to launch in early 2027.

Galaxy will provide trading execution and custody backend for Bank Leumi, while the bank handles customer relationships, KYC, compliance, and branding. This setup reflects a trend where banks are integrating crypto trading into their own apps, with Galaxy acting as an infrastructure provider behind the scenes.

Bank Leumi's decision to partner with Galaxy rather than building its own infrastructure is driven by cost savings, shorter development timelines, and lower compliance risks. Similarly, other traditional financial institutions such as Bank of New York Mellon (BNY) have also partnered with Galaxy for staking and custody services.

This transformation has a clear business logic: while crypto trading aimed at retail users is a crowded market with thin profit margins, infrastructure aimed at institutions offers a blue ocean where banks are willing to pay premiums for compliance, security, and integration capabilities.