Investment banks in El Salvador are now allowed to hold Bitcoin and digital assets on their balance sheets while providing cryptocurrency services to professional investors.
The new Investment Banking Law allows private investment banks to own a digital asset service provider license (PSAD), expanding the scope of cryptocurrency business, aiming to attract foreign investment and develop a financial center. El Salvador is moving towards building the first Bitcoin bank in the world.
MAIN CONTENT
Investment banks in El Salvador may hold Bitcoin and digital assets on their balance sheets.
The new law allows cryptocurrency services to be provided to professional investors with a PSAD license.
This country aims to develop a prominent financial center and open the first global Bitcoin bank.
What are investment banks in El Salvador allowed to do with Bitcoin and digital assets?
According to Juan Carlos Reyes, Chairman of the El Salvador Digital Assets Commission (CNAD), private investment banks can now hold Bitcoin along with digital assets on their balance sheets and serve professional investors.
This regulation helps expand financial operations as these banks can operate fully as Bitcoin banks. This means they are allowed to issue new cryptocurrency services, leveraging the advantages from the global cryptocurrency development trend.
What highlights does the new Investment Banking Law have in cryptocurrency operations?
The highlight of the law is the provision of a digital asset service provider (PSAD) license for investment banks, allowing them to operate a diverse business model, from fiat transactions to digital assets like Bitcoin.
The served investors are the "sophisticated investors" group equivalent to accredited investors in the United States, ensuring compliance with risk management regulations and protecting the interests of professional clients.
"The new Investment Banking Law enables private banks to provide comprehensive services with fiat and cryptocurrency, marking a significant turning point attracting international investment."
Juan Carlos Reyes, Chairman of CNAD, 10/08/2023
What is the significance of establishing the first Bitcoin bank in the world in El Salvador?
El Salvador becomes a pioneer nation as it plans to establish the first Bitcoin bank globally, deeply integrating cryptocurrency into the official financial system.
This move aims to attract foreign direct investment, enhance the national status as a new financial center, while creating a competitive edge in the global DeFi trend.
How might allowing investment banks to own digital assets affect El Salvador's financial market?
The expansion of services and ownership of digital assets enhances liquidity, promotes technological innovation, and attracts foreign capital into the cryptocurrency finance sector.
This regulation also enhances the competitiveness of local banks in an ever-changing international financial environment.
Which groups of investors benefit from this new policy?
The policy focuses on professional investors ("sophisticated investors"), who have deep knowledge and high financial capacity, ensuring that cryptocurrency services provided comply with risk management standards.
Frequently Asked Questions
What types of assets can investment banks in El Salvador hold?
Investment banks may hold Bitcoin along with other digital assets on their balance sheets under the new regulation.
Who is allowed to use the cryptocurrency services provided by investment banks?
This service is aimed at professional investors, equivalent to accredited investors in the United States.
Does the new law help El Salvador attract investment?
The law is expected to promote foreign capital flows and help El Salvador develop into a cryptocurrency financial center in the region.
What is special about the Bitcoin bank in El Salvador?
It is the first bank in the world to operate entirely based on Bitcoin and integrated cryptocurrency services.
What benefits does the PSAD licensing bring to banks?
This license allows banks to conduct a variety of cryptocurrency services in accordance with current regulatory standards, increasing competitiveness and innovation.
Source: https://tintucbitcoin.com/el-salvador-cho-phep-ngan-hang-kinh-doanh-tai-san-ky-thuat-so/
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