Bitcoin News Today: El Salvador Enacts Law Allowing Bitcoin Banking for Accredited Investors

El Salvador has taken a pivotal step in advancing its digital currency agenda by enacting the Investment Banking Law, which permits licensed investment banks to operate as Bitcoin banks for accredited investors [1]. This development, effective as of mid-August 2025, marks a significant shift in the country’s financial landscape, allowing institutions to hold, trade, and provide services involving Bitcoin and other digital assets under a new regulatory framework [2]. The law specifically targets sophisticated investors, a designation similar to accredited investors in the U.S., and excludes general retail customers from accessing these services [3].

The new law introduces a Digital Asset Service Provider (PSAD) license, which must be obtained by any investment bank wishing to engage in Bitcoin banking activities. With this license, banks can operate entirely in digital assets, offering services exclusively to high-net-worth and institutional clients [4]. To qualify, banks must maintain a minimum capital of $50 million, a requirement intended to ensure financial stability and professionalism in the emerging sector [5]. The regulatory framework distinguishes investment banks from commercial banks, allowing the former to hold digital assets on their balance sheets without the same restrictions as traditional banks [6].

The move is part of a broader strategy to establish El Salvador as a leading fintech hub in Latin America. President Nayib Bukele has consistently advocated for Bitcoin integration, and this latest legislation reinforces the government’s commitment to fostering a crypto-friendly environment. The law is expected to attract foreign investment and encourage institutional adoption of digital assets, particularly in a region where many countries are still evaluating the role of cryptocurrencies in their economies [7].

International collaboration is also shaping El Salvador’s Bitcoin strategy. Recent meetings with officials from Pakistan and Bolivia have emphasized a shared interest in leveraging digital currencies for economic growth and financial inclusion [8]. Notably, Bolivia’s Central Bank has signed a memorandum of understanding with El Salvador’s Commission for the Digital Asset Market (CNAD) to explore the potential of cryptocurrencies as an alternative to traditional fiat currencies, especially in light of regional currency volatility [9].

While the new law has been hailed as a progressive step by many, it has also drawn criticism. Some analysts argue that the focus on sophisticated investors limits the benefits to a small segment of the population and may not address the needs of ordinary citizens [10]. The lack of retail services has raised questions about the true extent of financial democratization, with critics suggesting that the policy could concentrate economic power rather than distribute it more broadly.

El Salvador’s regulatory innovation is expected to influence the broader cryptocurrency market, particularly in terms of institutional participation and regulatory experimentation. As the first country to adopt Bitcoin as legal tender, El Salvador now aims to deepen its role in the global digital asset ecosystem. While the law does not directly affect Bitcoin’s price, it contributes to a growing narrative of institutional interest and regulatory development, which can indirectly impact market sentiment [11].

Source:

[1] El Salvador Approves Investment Banking Law Enabling Bitcoin Banks, Coinpaper, https://coinpaper.com/10453/el-salvador-approves-investment-banking-law-enabling-bitcoin-banks

[2] El Salvador Banks Can Now Hold Bitcoin, Dataconomy, https://dataconomy.com/2025/08/11/el-salvador-banks-can-now-hold-bitcoin/

[3] Brazil Discusses Strategic Reserve; El Salvador Passes Bitcoin-Friendly Banking Law, Bitcoin.com, https://news.bitcoin.com/latam-insights-brazil-discusses-strategic-reserve-el-salvador-passes-bitcoin-friendly-banking-law/

[4] Inside El Salvador's Bitcoin Banking Law: Loans, Deposits and What Banks Can Now Do, MEXC, https://www.mexc.com/news/inside-el-salvadors-bitcoin-banking-law-loans-deposits-and-what-banks-can-now-do/64630

[5] El Salvador Courts Crypto's Deepest Pockets with New Banking Law, dlnews.com, https://www.dlnews.com/articles/regulation/el-salvador-courts-cryptos-deepest-pockets-new-banking-law/

[6] Best Crypto to Buy as El Salvador Welcomes Bitcoin Banks, Mitrade, https://www.mitrade.com/insights/news/live-news/article-3-1026905-20250810

[7] El Salvador Legalizes Bitcoin Banks with New Investment Banking Law, TradingView, https://www.tradingview.com/news/newsbtc:e031824cf094b:0-bitcoin-nears-120-000-again-as-el-salvador-opens-bitcoin-banks/

[8] El Salvador banks may provide crypto services to institutions, Happy, https://happycoin.club/en/bankam-salvadora-razreshili-hranit-bitkoiny-i-obsluzhivat-krupnyh-klientov/

[9] El Salvador Enables Bitcoin Banks for Accredited Investors, Bitget, https://www.bitget.com/news/detail/12560604906515

[10] Bitcoin News Today: El Salvador Enacts Law to Enable Bitcoin Banking for Accredited Investors, AInvest, https://www.ainvest.com/news/bitcoin-news-today-el-salvador-enacts-law-enable-bitcoin-banking-accredited-investors-2508/