El Salvador has adopted a new Investment Banking Law allowing Bitcoin banks to operate, making the country attractive for international investment institutions.
How the New Law Works
The new Investment Banking Law permits private investment banks in El Salvador to:
- Operate in both legal tender and foreign currencies. - Work with Bitcoin and other digital assets using a Digital Asset Service Provider (PSAD) license. - Function completely as a Bitcoin bank if desired.
Juan Carlos Reyes, president of El Salvador's Commission of Digital Assets (CNAD), stated that the changes aim to attract international investment and boost the country's financial sector.
Partnerships and Global Interest
El Salvador's pro-Bitcoin stance is helping it build international coalitions. Recently, President Nayib Bukele met with Bilal Bin Saqib, Pakistan’s state minister of crypto and blockchain. They discussed policies on how fledgling economies can use Bitcoin to grow their nations.
Another agreement was an administrative arrangement with the Central Bank of Bolivia to facilitate the use of cryptocurrencies, particularly important for Bolivia which is facing a shortage of US dollars.
Critics Weigh In
However, not everyone is on board with this development. One criticism of El Salvador's Bitcoin policies is that they do not help ordinary people. Instead, they primarily benefit institutions and governments. Institutional investors are driving adoption, but locals have not felt a direct impact on their daily lives.
With the introduction of Bitcoin banks, El Salvador is solidifying its position as a pioneer in national-level crypto adoption. The question remains whether this move will benefit the public or predominantly serve large investors.
