- New legislation allows banks that only accept Bitcoin to serve advanced investors.
- Banks can sell bonds, loans, and digital asset services.
- The minimum capital required for investment banks is $50 million.
A ground-breaking regulation that enables banks to function completely as Bitcoin banks for certified investors has been passed by the government of El Salvador. rewrite this in active voice
According to the new Investment Bank Law, investment banks are differentiated from traditional commercial banks. Such investment banks can design complex financial instruments like bonds and public-private partnerships.
Nevertheless, they will only provide service to sophisticated investors who have at least 250,000 dollars in liquid assets and financial knowledge.
Sophisticated Investors: The New Financial Elite
Banks must ensure that clients qualify as sophisticated investors. Such customers must demonstrate their awareness of investment risks and their financial ability to bear them. This makes the law focus on people with high net worth who can handle complicated investments.
Investment banks can use national or foreign currencies and even use Bitcoin and other digital assets. They are able to issue bonds, give loans, deal in currencies, and provide guarantees. Officials expect the radical step to attract wealthy investors and make the country a major crypto finance center.
Juan Carlos Reyes of the Salvadoran Commission of Digital Assets confirmed that banks licensed as Digital Asset Service Providers had the right to operate as Bitcoin banks. This gives a new opportunity to the crypto activities in a regulated environment.
Bitcoin Banks: Reshaping El Salvador’s Financial Future
Pro-government spokeswoman Dania Gonzalez clarified that, while other banks such as savings banks or personal loan banks exist, investment banks will aim to assist individuals in trading stocks and bonds and in making large investments.
Lawmakers designed the legislation to attract foreign capital and encourage developments in areas such as infrastructure and technology.
The law targets serious players by setting the minimum capital requirement at $50 million This capital entry point offers institutional and cryptocurrency investors stability and opportunity, as well as immunity, which attracts them to the market.
El Salvador’s policy is based on a decision that was reached in 2021 to make Bitcoin an officially recognized currency. This decision remains the basis for El Salvador’s policy.
The nation is extending its aspirations to become a regional hub in the cryptocurrency financial sector by launching banks solely dedicated to Bitcoin transactions for accredited investors.
Even though certain global organizations warn of the volatility of cryptocurrencies, this vision does not frighten El Salvador. The new law on investment banking might direct a large amount of resources to the development and innovation of the country.
