El Salvador plans to launch a Bitcoin bank offering Bitcoin-backed loans, savings accounts, and investment options. This follows the country’s historic decision to adopt Bitcoin as legal tender in 2021.
“As part of our economic plan for El Salvador, we propose a BPI, Bank for Private Investment, where we can diversify the financing options offered to potential investors in Dollars and #Bitcoin,” said the El Salvadoran Ambassador to the United States, Milena Mayorga, on her X(Formerly Twitter) account.
According to a report shared by the Ambassador, the Technology, Tourism, and Investment Commission of the Legislative Assembly has already reviewed the draft reform of the Banking Law. This reform aims to promote economic growth, enhance the strength of the financial system, and increase El Salvador’s competitiveness.
The president of the Commission, represented by Dania González, has accepted the draft reform of the Banking Law, which will guide the new banking system. María Luisa Hayem, El Salvador’s Minister of Economy, did not comment on the initiative during the presentation.
The draft of the new Banking Law stipulates that any new private investment banks must be established with at least $50 million in share capital. Additionally, these banks must have a minimum of two shareholders, who can be foreign nationals or entities.
The announcement has caught the attention of cryptocurrency enthusiasts, who see it as a significant step toward mainstream acceptance of digital currencies. A user on X, RichQuack, remarked, “This is one of the ways to drive [the] adoption of crypto. Exciting times for Bitcoin and investors in El Salva.”
Another X user, responding to an X post by the El Salvadorian Ambassador to the United States, said the move would be a game-changer for the South American country. “They already have 100% clean geothermal $BTC Miner. Now, [this is] a glimpse into the future where entire economies will diversify the financing options to potential investors in Dollars and $BTC,” he added.
El Salvador has been at the forefront of cryptocurrency adoption, particularly with Bitcoin. It was the first nation to adopt Bitcoin as legal tender and has amassed a significant reserve, mining over 5,000 BTC since 2021. The country also purchases one Bitcoin daily, increasing its holdings to over 5,750 BTC.
Additionally, El Salvador uses geothermal energy from its volcanoes to power operations. This unique approach has enabled the country to mine more Bitcoin. It also inaugurated the National Commission of Digital Assets (CNAD) to create guidelines for its digital assets economy.
While advancing its Bitcoin initiatives, the IMF has strongly condemned the nation’s policy, arguing that making Bitcoin legal tender prompts significant macroeconomic, financial, and legal challenges that necessitate thorough examination.
Despite this, Nayib Bukele, re-elected for a second term and continuing his vision to transform his South American country, has witnessed growing citizen support for the decision. Last year, he assured investors that an agreement with the IMF could be anticipated following the elections.
