- The new law allows banks with over US$50 million capital to offer cryptocurrency services.
- It targets “sophisticated investors” holding more than US$250,000 in liquid assets, including Bitcoin.
- Licensed institutions can hold Bitcoin, issue tokens, and create regulated crypto-linked investment products.
El Salvador’s National Assembly has passed the Investment Banking Law, enabling large financial institutions to provide services denominated in Bitcoin and other digital assets to qualified investors. The legislation applies to banks with at least US$50 million (AU$76.74 million) in capital, granting them investment bank status and allowing them to seek additional licences for crypto-related operations.
These investment banks will be permitted to work with “sophisticated investors”, defined as those holding more than US$250,000 (AU$383,700) in liquid assets, which may include Bitcoin. This legislation builds on existing licensing categories for Bitcoin and digital assets, enabling investment banks to combine them with their current bank licences instead of operating under a distinct regime.
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Integrating Digital Assets into Finance
The change allows such banks to hold Bitcoin, issue tokens, and design crypto-linked financial products within the current legal structure. According to Representative Dania González this creates a new, regulated banking category that complements El Salvador’s traditional financial system.
Another benefit is the financing of the financial system, since the institutional architecture of the Salvadoran financial system will be expanded as a new, but regulated and supervised entity, complementary to the traditional banking system we are all familiar with.
Juan Carlos Reyes, president of the country’s Commission of Digital Assets, noted that with the appropriate licence, these banks could choose to operate entirely as Bitcoin banks, offering services in legal tender, foreign currencies, and digital assets. The government views the reform as a step towards attracting foreign investment and strengthening El Salvador’s position as a regional finance hub.
The law also authorises investment banks to facilitate fundraising, extend credit, organise foreign exchange transactions, and establish guarantees, among other services. González said this framework could help fund major infrastructure projects, product launches, and international expansions, with regulated transactions involving Bitcoin, stablecoins, gold, and tokenised bonds.
The move marks a shift from El Salvador’s earlier retail-focused Bitcoin strategy towards courting institutional capital. This comes after reduced public-sector Bitcoin initiatives in 2025, following a US$1.4 billion (AU$2.15 billion) IMF loan agreement. Despite government claims of daily Bitcoin purchases, the IMF reported no new acquisitions since the loan deal, with recent transfers representing consolidation of existing holdings.
Related: Bolivia Teams Up with El Salvador to Fast-Track Crypto Integration
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