Bitcoin News Today: El Salvador to Launch Bitcoin Banks Under Bukele’s Crypto Strategy

El Salvador has announced plans to introduce Bitcoin banks in a post published on X, signaling a further step in its Bitcoin-focused economic strategy under President Nayib Bukele [1]. The post stated, “Bitcoin Banks are coming to Bitcoin country,” suggesting the possibility of specialized financial institutions dedicated to Bitcoin operations [2]. While the details of the proposal remain unclear, the move reflects the country’s continued commitment to integrating cryptocurrencies into its financial system.

This initiative follows Bukele’s earlier proposal for a Bank for Private Investment (BPI), which aimed to provide a regulatory framework for alternative financial institutions with less stringent oversight than traditional banks. According to Milena Mayorga, El Salvador’s U.S. ambassador, the BPI model would allow for greater flexibility in forming international partnerships and managing loan amounts [3]. The proposed Bitcoin banks could potentially offer services such as deposits, lending, and investment in Bitcoin, expanding financial access to the country’s large unbanked population [4].

Max Keiser, a senior Bitcoin advisor to Bukele, has expressed optimism that such a move could enhance the country’s GDP. Meanwhile, Cathie Wood, CEO of Ark Investment, has forecasted that El Salvador could see higher economic growth over the next five years if the BPI is implemented [5]. Analysts, however, have raised concerns about the volatility of Bitcoin and the risks associated with its integration into the banking sector. The International Monetary Fund (IMF) has also warned about the instability and consumer protection challenges linked to cryptocurrency adoption [6].

El Salvador has been a pioneer in Bitcoin adoption since September 2021, when it became the first country to recognize Bitcoin as legal tender. The government introduced the state-backed Chivo wallet, invested in Bitcoin reserves and bonds, and launched a geothermal-powered Bitcoin mining project. Despite these efforts, the IMF has clarified that El Salvador has not purchased additional Bitcoin under its $1.4 billion credit agreement. The recent activity in the country’s Bitcoin wallet was reportedly a consolidation of existing holdings rather than new purchases, countering government claims and raising questions about communication strategies [7].

The Technology, Tourism, and Investment Commission is still considering the BPI proposal, and it remains uncertain whether the Bitcoin bank initiative will follow that framework or introduce a new model. The government has not yet released a detailed regulatory structure for these institutions. As the plans develop, El Salvador continues to emphasize its commitment to advancing Bitcoin adoption, despite the regulatory and economic challenges that come with it.

The country’s Bitcoin holdings reached a high of $767 million, while Bitcoin itself hit an all-time high of $123,000 last month [8]. The outcome of this latest initiative will likely shape how the country’s financial system evolves in the digital age.

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[1][2][3][4][5][6][7][8]https://coinmarketcap.com/community/articles/6895aaf5d018386da1137475/