The government of El Salvador has introduced a reform proposal to establish a private investment bank, allowing operations in both Bitcoin and the US dollar, as stated by El Salvador’s Ambassador to the US, Milena Mayorga. Under the proposed reform, the bank would have the authority to accept deposits, issue loans, and potentially offer various financial services using Bitcoin alongside the US dollar.
Moreover, the reform aims to permit private banks to apply for authorization to provide digital asset and Bitcoin services, according to local media. This initiative is part of a broader effort to create a legal framework for El Salvador’s private investment bank, facilitating the flow of financial resources toward businesses and government projects. The bank would be required to have a minimum capital of $50 million and could include foreign shareholders.
The reform bill defines “sophisticated investors” as individuals with investment experience, risk assessment skills, and freely available assets equivalent to $250,000 or $500,000. Furthermore, compared to traditional banks, private investment banks would face fewer restrictions, including the lifting of prohibitions on foreign-related contracts with affiliated entities and the removal of limitations on loan concentrations and credit exposure to a single borrower. While the reform proposal has been submitted to the Legislative Assembly, it has not yet been approved. El Salvador, under the leadership of President Nayib Bukele, a staunch supporter of Bitcoin, is expected to continue advancing its pro-Bitcoin agenda, aiming to increase Bitcoin’s adoption and usage in the future.
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