El Salvador Approves Law Allowing Investment Banks to Hold Bitcoin
El Salvador’s National Assembly has approved a new law allowing major financial institutions to trade Bitcoin and other digital assets.
Accordingly, financial institutions with a capital of at least $50 million will be able to gain “investment bank” status and offer Bitcoin and crypto asset-based financial services to qualified investors.
The new regulation allows investment banks to add Bitcoin service provider, digital asset service provider or digital asset issuer licenses to their existing bank licenses. This will allow institutions with strong capital to hold Bitcoin, issue tokens, and offer crypto-related financial products.
“The institutional structure of El Salvador’s financial system will be expanded with a new regulated and supervised structure, complementary to the traditional banking system,” said Deputy Dania González. The law was also supported by the Ministry of Economy.
El Salvador, which mandated businesses in the country to accept payments with Bitcoin in 2021, lifted this requirement in early 2025 to receive a $1.4 billion loan from the IMF, slowing down public sector Bitcoin initiatives.
However, low adoption rates have attracted attention; it was found that crypto usage in remittance transactions is only at 1% level and only 20% of the public has adopted crypto.
Although it was officially announced that 1 BTC was purchased per day, the information given to the IMF showed that this was not a new purchase, but transfers from existing government wallets to the reserve wallet.
If you’d like, I can expand this article into a more analytical version focusing on El Salvador’s institutional transformation of Bitcoin. This would serve as a market commentary to increase investor interest.
*This is not investment advice.