Bitcoin News Today: El Salvador Approves Bitcoin Investment Banks for High-Net-Worth Clients

El Salvador has taken a significant step in its Bitcoin-first economic strategy by approving a new Investment Banking Law, which enables private investment banks to operate entirely in Bitcoin (BTC) for high-net-worth clients. The legislation allows banks with a minimum $50 million in capital to apply for a Digital Asset Service Provider (PSAD) license, enabling them to offer services in BTC, tokenized products, USD, gold, or other approved assets. The initiative aims to attract foreign capital and position El Salvador as a digital finance hub in the region [1].

The law distinguishes between investment and commercial banks, granting the former a more flexible regulatory framework. These investment banks can engage in corporate finance activities, underwrite securities, manage assets, and handle cross-border financing, all while holding digital assets directly on their balance sheets. According to Dania González, a member of the Legislative Assembly, this move is intended to generate international institutional confidence and competitiveness by turning El Salvador into a specialized financial center [1].

The new regulation targets sophisticated investors—individuals or institutions with at least $250,000 in liquid assets and the capacity to manage complex financial risks. This threshold ensures the services are limited to those with substantial market experience, similar to the accredited investor model in the U.S. The focus on institutional-grade finance sets the model apart from retail banking, potentially attracting multinational investment groups and capital inflows from crypto-friendly jurisdictions [1].

This shift in strategy marks a departure from El Salvador’s earlier emphasis on retail adoption through the Chivo wallet. By allowing banks to operate entirely in BTC, the country is opening the door for large-scale capital inflows and fostering institutional demand for Bitcoin. Juan Carlos Reyes, president of the Commission of Digital Assets (CNAD), stated that with the proper license, a bank could operate entirely as a Bitcoin bank, reinforcing BTC’s role as legal tender and signaling a regulated approach to Bitcoin banking [1].

El Salvador’s regulatory approach includes oversight from the Central Reserve Bank (BCR), which will ensure compliance with capital thresholds, liquidity ratios, and digital asset risk management. The Superintendency of the Financial System (SSF) will also conduct audits and monitor transparency to protect investors. These measures aim to mitigate risks associated with unregulated crypto banking and enhance trust among global investors regarding the safety and legality of the El Salvador market [1].

The new law follows a series of international engagements aimed at strengthening El Salvador’s position in the global crypto ecosystem. Recent discussions between President Nayib Bukele and Pakistan’s Minister of Crypto and Blockchain Bilal Bin Saqib explored joint strategies for Bitcoin adoption and energy policy. Additionally, Bolivia’s central bank signed a memorandum of understanding with CNAD to promote cryptocurrency use as an alternative to scarce U.S. dollars, particularly in cross-border trade where stablecoins like USDT are already gaining traction [1].

These developments highlight El Salvador’s broader ambition to integrate Bitcoin not only domestically but also into the wider global financial system, reinforcing its commitment to innovation and digital finance leadership in the region.

Source: [1] El Salvador Opens Door for Fully Bitcoin-Based Banks, Targeting $250K+ Investors (https://www.cryptoninjas.net/news/el-salvador-opens-door-for-fully-bitcoin-based-banks-targeting-250k-investors/)