- El Salvador approves law allowing banks to become Bitcoin-focused.
- Focus is on certified investors only, impacting financial services.
- Potential increase in institutional crypto participation.
El Salvador’s legislature has enacted an Investment Banking Law allowing banks to operate fully as Bitcoin banks for accredited investors, with the confirmation coming from Juan Carlos Reyes, the digital asset regulator.
This law is crucial as it introduces a regulated framework for Bitcoin banking in El Salvador, potentially boosting institutional participation and solidifying the nation’s stance as a crypto-friendly jurisdiction.
El Salvador’s legislature has passed an Investment Banking Law enabling banks to function as Bitcoin-focused entities. This move targets sophisticated investors, with state regulator Juan Carlos Reyes confirming the law’s scope and requirements.
The approval allows investment banks in El Salvador to hold Bitcoin and digital assets. With a PSAD license, these banks could serve exclusively accredited investors, distinguishing them from commercial banks.
The new law could bolster El Salvador’s financial sector by attracting institutional participation. Licensed banks can now engage with Bitcoin and other digital assets legally, emphasizing the role of sophisticated investors.
Politically and economically, this development highlights El Salvador’s ongoing commitment to integrating Bitcoin in its financial system. Investment banks can operate in legal tender and foreign currencies, underlining the law’s broad remit.
The law reflects El Salvador’s unique stance on cryptocurrency adoption. Historically, the country has been a pro-Bitcoin advocate. This move further integrates digital assets within its institutional banking framework.
“The law allows private investment banks to operate in legal tender/foreign currency for ‘Sophisticated Investors’ and engage in digital assets like Bitcoin,” said Juan Carlos Reyes of CNAD, emphasizing the legal clarity provided by the new framework.
Experts indicate potential increased foreign institutional involvement, given the legal clarity now available. Economic analysts underscore that similar legal precedents globally typically emphasized retail restrictions, thus making El Salvador’s approach noteworthy.
