The El Salvador government has taken a groundbreaking step by submitting a banking law amendment to enable the creation of private investment banks for Bitcoin investors.
This move, aimed at promoting economic growth and diversifying financial services, could further solidify El Salvador's position as a pioneer in cryptocurrency adoption.
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Submission of Cryptocurrency-Related Banking Law Amendment
The government of El Salvador has submitted a banking law amendment proposal that would enable the establishment of private investment banks (BPI) for Bitcoin investors, as reported by multiple media outlets.
This amendment aims to facilitate the creation of banks that can offer services related to Bitcoin and stablecoins. If the proposal is approved, it is expected to introduce new financial services and promote economic development.
Specifically, these new banks would offer a variety of services such as economic risk management, financial product purchases, investment management, and other financial derivatives.
These services are expected to support "El Salvador's legal currencies" like the US dollar and Bitcoin.
Furthermore, the bill supports financial products based on stablecoins, opening the door to investment products rooted in cryptocurrencies.
Capital and Customer Requirements for New Banks
However, establishing a private investment bank (BPI) requires "a minimum capital of $50 million" and "at least two shareholders (foreigners allowed)."
The private investment banks to be established will provide services exclusively to selected investors. Customers of these banks must either prove they own at least $250,000 in assets and pass the bank's own tests or prove they have assets worth $500,000.
While there are certain standards for establishing a bank and opening an account, if this bill is approved and the establishment of banks becomes possible, it is anticipated that the economic development of El Salvador will be further promoted through financial services utilizing Bitcoin and other cryptocurrencies.
This will also strengthen the country's presence as "the first nation to adopt Bitcoin as legal tender."
El Salvador continues to actively pursue cryptocurrency-related policies, including the ongoing "daily Bitcoin purchase strategy" and the publication of the "latest version of Bitcoin educational materials."
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