Pepper the digital bank from Beit Leumi received official approval to trade in virtual currencies

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by Ifi Reporter Category:Financial Oct 29, 2022

Pepper, the digital bank from Beit Leumi, received official approval from the Bank of Israel this weekend to allow its customers to trade in virtual currencies. The service, which was announced about six months ago, will be available to customers through the Pepper INVEST capital market trading application and is expected to be launched within the next month, when the waiting list for the service will open in the coming days. In addition, in the future the service is expected to be extended to Bank Leumi customers as well.
As part of the service, Pepper customers will be able to buy and sell virtual currencies from an amount of 50 shekels, directly through the bank's trading platform (through the bank's cooperation with the American company PAXOS), when in the first stage trading will be offered only in the two largest currencies in the market - Bitcoin and Ethereum. At the same time, as of now it is not yet known what the trading costs and conversion differences that will be charged to the customers will be and whether the bank's offer will indeed be profitable compared to what other trading platforms that exist in the market - in Israel and in the world - offer.
In about a week and a half (November 9, 2022) the amendment to the Bank of Israel's Money Laundering and Terrorist Financing Risk Management Directive is expected to enter into force, which calls on banks to stop blanketly refusing crypto-currencies and examine each case individually. At the same time, the central bank has already emphasized in the past that "the amendment of the instruction does not mean that every bank must accept every action in the field".
Although at this stage it is not known how much commission will be charged by Pepper, this is a significant change in the attitude of the banking system in Israel to trading in virtual currencies and a relief to some customers who prefer not to deal with the tax payments themselves, but rather let the bank do it for them in exchange for a commission or management fee.
It should be noted that this option currently also exists on other trading platforms in Israel, such as Altshuler Sheham Horizon, but the option to buy and sell coins starting at only NIS 50 is expected to make the process even easier and open up the possibility to a wide customer base.
Trading through Pepper will allow customers to purchase and keep the coins using their regular bank account, without having to convert to foreign currency or necessarily have a separate digital wallet. However, as mentioned, it is possible that the bank's purchase and conversion rates (which are still "behind the scenes" at the time of trading ) will be less profitable than on other trading platforms - a problem that is very familiar among some of the leading crypto trading companies in Israel.
In addition to the fact that Pepper will be the first bank in Israel to allow direct trading in crypto, as of today - before the amendment to the Bank of Israel directive has come into effect - a large number of banks in Israel do not allow their customers to deposit and withdraw funds originating in crypto (even for trading on other platforms), or they pile up heavy difficulties About the merchants who make the operation almost impossible.
In the meantime, it seems that the regulation (regulation) of service providers in the field of crypto in Israel has been progressing recently, when a few weeks ago the former commissioner of the Capital Markets, Insurance and Savings Authority at the Ministry of Finance, Dr. Moshe Barkat, announced the granting of the first permanent licenses to two companies that deal in the field.

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