Bitcoin News Today: El Salvador Legalizes Bitcoin Investment Banks Under New Law

El Salvador has taken a bold step in its ongoing digital financial transformation by authorizing investment banks to manage Bitcoin and digital assets under a newly enacted Investment Banking Law, effective August 2025. This development marks a significant shift in the country’s financial architecture, expanding the role of digital assets beyond legal tender to include structured investment opportunities for accredited investors. The law distinguishes investment banks from commercial banks, granting the former the exclusive right to handle Bitcoin and digital assets under a PSAD (Digital Asset Service Provider) license [1].

The initiative is led by President Nayib Bukele and Juan Carlos Reyes of the Commission of Digital Assets (CNAD), who have been instrumental in advancing El Salvador’s Bitcoin strategy since the 2021 adoption of Bitcoin as legal tender. Under the new law, investment banks can now offer services such as deposits, lending, and investments in Bitcoin to “sophisticated investors,” signaling a move toward institutional-grade crypto finance. This legal framework supports the country’s ambition to become a regional leader in digital asset integration while attracting international capital [2].

The approval of this law has been widely viewed as a strategic move to differentiate El Salvador from its regional neighbors and to reinforce its position as a crypto-friendly jurisdiction. Analysts suggest that this policy could influence broader Latin American financial markets to consider similar digital asset integration strategies. However, the decision has also drawn international scrutiny, particularly from the IMF, which previously raised concerns about the economic stability risks associated with El Salvador’s Bitcoin adoption [3].

The government has demonstrated continued commitment to its crypto agenda by acquiring an additional 7 BTC in a recent week, bringing its total holdings to 6,258.18 BTC. Despite facing IMF loan conditions that initially sought to restrict such purchases, El Salvador secured a $120 million disbursement from the institution as part of a larger $1.3 billion lending agreement, indicating a nuanced negotiation to continue its Bitcoin-based economic strategy [4].

The launch of regulated Bitcoin investment banks follows earlier discussions about establishing a “Bitcoin city” and expanding mining operations. These developments reflect a broader vision to leverage Bitcoin as a stabilizing force in a region historically affected by inflationary pressures. The government appears to be using digital assets as a tool to hedge against economic volatility and to diversify its financial infrastructure [5].

From a policy and market perspective, the move could set a precedent for national banking systems incorporating cryptocurrencies, particularly in emerging economies seeking innovative financial solutions. However, the success of the initiative will depend on several factors, including the stability of the Bitcoin market, the effectiveness of the regulatory framework, and the level of participation from both local and global investors [6].

Sources:

[1] https://coinmarketcap.com/community/articles/6897f28f0ddac76721c6f5f8/

[2] https://www.arabictrader.com/en/news/cryptocurrencies/191463/el-salvador-is-nearing-the-launch-of-the-worlds-first-bitcoin-bank

[3] https://www.instagram.com/p/DNG_8i7IwYI/el-salvador-has-officially-announced-plans-to-launch-a-bitcoin-bank-aiming-to-pr/

[4] https://www.chaincatcher.com/en/article/2196155

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