Bitcoin bank proposal gains momentum in El Salvador

    2024.06.15 | exchangesranking | 40onlookers

    El Salvador's pro-Bitcoin president Nayib Bukele is proposing the establishment of private investment banks within the nation, which if approved, will offer Bitcoin (BTC) investors access to financial services and fewer restrictions compared to traditional banks.

    “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,” the Salvadoran Ambassador to the United States Milena Mayorga wrote in a June 14 post on X.

    “President Bukele hits the ground running in new term with new legislation establishing a Bitcoin Bank,” senior Bitcoin advisor to Bukele, Max Keiser, added on the same day, noting Ark Invest CEO Cathie Wood’s forecast that El Salvador’s real GDP “could scale 10-fold during the next five years” has only become “more likely.”

    Nayib Bukele was recently sworn in for a second five-year presidential term. Source: Casa Presidencial

    It comes only two weeks after Bukele was sworn in for another five-year presidential term after a landslide electvictory in February.

    Bank for Private Investment will not have all the same 'prohibitions' in banking laws

    According to El Mundo, the BPI will not face the same stringent laws as traditional banks, such as restrictions on engaging with overseas banks or finance companies "linked to their shareholders or in a business group." Loan restrictions will also be eliminated.

    “Investment banks will also not be subject to the prohibition of "granting credit or assuming risks for more than 25% of their Asset Fund in relation to the same person,” the June 14 report stated.

    If approved, the new private investments "must be created" with a minimum share capital of $50 million and require at least two shareholders, who may be foreigners.

    Related: El Salvador launches $360M Bitcoin treasury monitoring website

    It was reiterated that a BPI would be able to operate in any legal tender, including the United States Dollar and Bitcoin, and even seek approval to become digital asset and Bitcoin service providers.

    El Salvador’s Minister of Economy, María Luisa Hayem, proposed the reform to the Technology, Tourism, and Investment Commission under Bukele's direction. However, it has not yet been approved.

    “The reform has not been approved; The legislators have not yet agreed to call officials to consult the objectives of the project nor have they put it to a vote in the Commission,” it added.

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