El Salvador allows investment banks to hold bitcoin

The El Salvadoran Congress has just passed a new law allowing large-scale financial organizations to apply for licenses to provide financial services priced in Bitcoin and other digital assets for "professional investors."

According to regulations, organizations with a minimum capital of 50 million USD will qualify to become investment banks — a group that is subject to separate management compared to conventional commercial banks. These investment banks can apply for various types of licenses to offer financial products related to cryptocurrencies to investors holding at least 250,000 USD in liquid assets, including BTC.

El Salvador already has cryptocurrency license categories such as: Bitcoin service providers, digital asset service providers, and digital asset issuers. The new law allows banks to "stack" these licenses on top of their existing banking licenses, thereby legally holding Bitcoin, issuing tokens, and conducting transactions related to digital assets within the current legal framework, rather than having to create a new licensing mechanism.

"The institutional architecture of El Salvador's financial system will be expanded with a new model, but still within the framework of management and supervision, complementing the traditional banking system that we are familiar with," said legislator Dania González. This law has received support from the Ministry of Economy of El Salvador.

From Retail Adoption to Institutional Investment

This move reflects a shift in focus from encouraging the public to use Bitcoin to attracting large capital from institutions. Although in 2021 El Salvador mandated that all businesses accept Bitcoin as a means of payment, by early 2025, the government had retracted this regulation along with several related policies to secure a loan of 1.4 billion USD from the IMF.

In fact, the level of Bitcoin usage among the population remains low: only about 1% of remittances are related to cryptocurrencies and only 2 out of 10 Salvadorans reported that they have ever used digital currency.

The Bitcoin office — under the supervision of President Nayib Bukele — still claims to buy 1 BTC every day. However, the President of the Central Bank and the Minister of Finance of El Salvador told the IMF in July that the country has not purchased any additional Bitcoin since signing the loan agreement. The IMF report states that the "purchases" announced are essentially just the consolidation of BTC from various government wallets into a central reserve wallet, rather than new purchases.

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