Bitcoin News Today: El Salvador Legalizes Bitcoin-Only Investment Banks for Accredited Investors

El Salvador has authorized investment banks to fully operate as Bitcoin banks for accredited investors following the passage of its new Investment Banking Law in August 2025. This development marks the first time a sovereign nation has legally established a framework enabling banks to operate exclusively with Bitcoin, serving sophisticated investors who meet specific accreditation criteria. Under the new law, banks must hold a minimum capital of $50 million and obtain a Digital Asset Service Provider (PSAD) license to engage in Bitcoin-related financial activities [1].

The CNAD, El Salvador’s financial regulatory body, confirmed that the initiative distinguishes investment banks from commercial banks, focusing on high-net-worth and institutional participants. According to CNAD Chairman Juan Carlos Reyes, banks with PSAD licenses may choose to function entirely as Bitcoin banks, offering services such as underwriting, issuing securities, and managing institutional-grade digital assets [2]. This shift is part of a broader effort to attract international capital and diversify the country’s financial ecosystem, aligning with President Nayib Bukele’s economic vision to reduce dependence on traditional fiat currencies [3].

The law removes prior legal restrictions that prevented banks from directly engaging with Bitcoin, thereby expanding institutional access to digital assets and reinforcing El Salvador’s commitment to digital currency adoption. The government already holds over 6,258 BTC, which it uses as a hedge against inflation and economic instability [4]. The initiative also aligns with regional collaborations, including discussions with countries like Pakistan and Bolivia to align on Bitcoin policies, potentially increasing cross-border capital flows and enhancing El Salvador’s standing as a crypto-friendly jurisdiction [5].

While the move has drawn global attention, it has also sparked debate among international financial institutions. The IMF, for instance, has raised concerns regarding the volatility of Bitcoin and the potential risks it poses to macroeconomic stability [6]. Analysts suggest that the success of these Bitcoin banks will depend on maintaining regulatory clarity, managing the inherent volatility of the digital asset, and sustaining investor confidence [7].

El Salvador’s regulatory approach reflects a growing global interest in integrating digital assets into traditional financial systems. However, the country’s experience will serve as a critical test case, offering insights into the challenges and opportunities of institutional Bitcoin adoption. By enabling banks to operate solely with Bitcoin, El Salvador is pushing the boundaries of financial innovation and setting a potential precedent for other nations considering similar strategies [8].

Sources:

[1] AInvest https://www.ainvest.com/news/bitcoin-news-today-el-salvador-launch-world-bitcoin-banks-2025-2508/

[2] MEXC https://www.mexc.com/news/chairman-of-el-salvadors-cnad-new-investment-banking-law-allows-licensed-banks-to-conduct-digital-asset-business/64478

[3] Cryptopolitan https://www.cryptopolitan.com/el-salvador-bitcoin-banks-bitcoin-country/

[4] AMBCrypto https://ambcrypto.com/how-el-salvadors-new-law-could-make-bitcoin-banks-a-reality/

[5] FinanceFeeds https://financefeeds.com/el-salvador-opens-door-to-bitcoin-investment-banks-with-new-law/

[6] Moneyweb https://www.moneyweb.co.za/moneyweb-crypto/in-land-of-25-inflation-crypto-is-starting-to-replace-money/

[7] Cointelegraph https://cointelegraph.com/

[8] Binance https://www.binance.com/en/square/post/08-09-2025-el-salvador-advances-bitcoin-investment-banking-with-new-legislation-28094472887577