Key Takeaways
- El Salvador’s new law allows investment banks to offer Bitcoin and digital asset services to sophisticated investors with at least $250,000.
- Investment banks can become digital asset service providers and issuers, operating separately from commercial banks.
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El Salvador’s Legislative Assembly has approved a sweeping Investment Banking Law that will create a new class of financial institutions serving only high-net-worth and institutional clients, according to a recent press release.
El Salvador’s legislature introduced the measure last year in a bid to establish a private investment bank able to handle Bitcoin transactions, with plans to diversify funding sources for investors and allow deposits, lending, and wider financial services in BTC and USD.
Backed by the Ministry of Economy, the measure sets out a regulatory framework for investment banks offering services such as asset management, financial advisory, corporate transaction structuring, structured financing, and market analysis.
Investment banks must maintain a minimum share capital of $50 million and operate separately from commercial banks. These institutions can request authorization to become digital asset service providers, digital asset issuers, and Bitcoin service providers.
Lawmakers said the move is aimed at attracting international private capital, financial groups, and wealthy individuals to use El Salvador as a base for regional operations.
The new law, sponsored by the Ministry of Economy, limits clients to sophisticated investors, defined as individuals or entities with extensive market experience, the capacity to shoulder complex financial risks, and a minimum of $250,000 in liquid assets, which can be Bitcoin, treasury bonds, tokenized products, gold, or cash.
The framework permits investment banks to conduct various operations, such as bond issuance, loan granting, foreign currency transactions, and complementary services.
The new banks will be regulated by the Central Reserve Bank (BCR), which will set standards for capital, liquidity, risk management, and digital asset operations. The Superintendency of the Financial System (SSF) will supervise compliance, transparency, and investor protection.
Dania González, a member of El Salvador’s Legislative Assembly, said investment banking is key to helping governments, companies, and institutions raise capital for major projects.
The law is expected to generate substantial benefits, from attracting foreign capital, international financial groups, and high-net-worth individuals to positioning El Salvador as a regional financial hub.
“We are turning El Salvador into a specialized financial hub, generating an international reputation, institutional confidence, and competitiveness,” González noted.
The legislative development comes after the National Bitcoin Office (ONBTC) signaled earlier this week that Bitcoin banks were coming to El Salvador.
This is a developing story. Please come back for further updates.
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