The new Investment Banking Law of El Salvador allows regulated banks to own Bitcoin and provide cryptocurrency services to professional investors, gradually helping the country rise as a cryptocurrency financial center in the region and globally.
El Salvador is ramping up its national cryptocurrency strategy, making a big bet on Bitcoin with a clear legal roadmap, attracting foreign investment, and becoming a new destination for global cryptocurrency funds.
MAIN CONTENT
The new Investment Banking Law paves the way for banks to hold Bitcoin and provide cryptocurrency services.
El Salvador aims for a role as a cryptocurrency financial center with legal mechanisms, capital, and international cooperation.
The growing interest of global investors drives a race among countries in cryptocurrency finance.
What is El Salvador's new Investment Banking Law?
The new Investment Banking Law allows investment banking organizations in El Salvador to own Bitcoin and provide cryptocurrency services, expanding their scope of activity beyond traditional commercial banking models.
The biggest difference of this law is the allowance for investment banks to handle both fiat and foreign currency, while also supporting complex transactions related to infrastructure, energy, and technology. These organizations will need to apply for a Digital Asset Service Provider license if they want to operate fully in a Bitcoin-native manner.
According to sources from El Salvador's Digital Asset Commission (CNAD), this law applies only to professional investors, defined as individuals or organizations that own at least 250,000 USD in liquid assets and have extensive experience in the market.
"With the Digital Asset Service Provider (PSAD) license, a bank can choose to operate entirely as a Bitcoin bank."
Juan Carlos Reyes, Chairman of El Salvador's Digital Asset Commission (CNAD), 2025
The addition of this legal framework helps clearly differentiate investment banks from traditional commercial banks in El Salvador, as more countries become interested in the governance of cryptocurrency assets.
What is the context and goal behind the establishment of El Salvador's Investment Banking Law?
The main goal of the new law is to strengthen El Salvador's position as an emerging cryptocurrency financial center, attract international investment capital, and support the government’s Bitcoin-centric policy.
This move coincides with international cooperation initiatives such as agreements with Pakistan and Bolivia to enhance the national footprint in the cryptocurrency financial sector.
Policymakers expect foreign capital to flow robustly into El Salvador thanks to clear regulations, flexible ownership conditions, and synergy from large infrastructure and technology projects.
"El Salvador creates a unique legal framework, reviving the 'gold standard' of banking - this time with Bitcoin. This particularly attracts global institutional investors."
Quoted from AMBCrypto report, 2025
What are the advantages of Bitcoin investment banks in El Salvador?
Bitcoin investment banks in El Salvador can operate with Bitcoin and USD, providing various financial services such as deposit mobilization, lending, and issuance guarantees, meeting the growing demands of institutional investors.
Notably, the minimum capital of 50 million USD, the ability to allow foreign investors to own capital, promotes competition, professionalizes operations, and attracts strong capital inflows from abroad.
In addition, strict licensing conditions and regulatory adjustments will filter out participants who truly have financial capacity and market understanding.
"Capital regulations and specialized controls for the cryptocurrency sector are the keys to increasing transparency, protecting investors, and attracting international capital."
Analysis from Cointelegraph Research, 2025
Who is eligible to use the services of Bitcoin investment banks in El Salvador?
Only individuals or organizations recognized as professional investors, owning at least 250,000 USD in liquid assets and having financial investment experience, are eligible to participate in the services of Bitcoin investment banks in El Salvador.
This regulation aims to ensure participants have knowledge, risk tolerance, and operations suited to the volatility characteristics of the cryptocurrency market.
This also contributes to transparency and enhances governance standards, bridging the gap between traditional banking and cryptocurrency investment banking models.
How does El Salvador's policy impact the global cryptocurrency financial market?
The Investment Banking Law and the Bitcoin banking policy position El Salvador to lead the regional and global trend towards Blockchain applications in traditional finance.
When investment banks are allowed to own Bitcoin and provide related services, institutional liquidity sources are activated, creating momentum to attract foreign capital flows and develop the international digital asset ecosystem.
"El Salvador becomes a model for emerging countries by establishing clear laws that encourage financial innovation based on Blockchain technology."
Bloomberg's opinion page, 2025
Comparing El Salvador's Bitcoin investment banking model with other major financial centers
Currently, the top 13 largest banks in the USA, such as JPMorgan, Citigroup, and Goldman Sachs, are researching or implementing Bitcoin custody and trading services. However, the legal framework allowing banks to 'bank Bitcoin' at a national scale remains a pioneering step by El Salvador.
Additionally, more than 100 large publicly listed corporations globally currently own nearly 1 million BTC, indicating growing interest from financial institutions in digital assets.
Criteria El Salvador USA/Europe Legal BTC for investment banking Legal, clear, separately licensed Testing, not fully permitted Minimum capital requirement 50 million USD No general regulation Banking services with BTC Allowed to provide comprehensive Limited or only custodial-ID trader Attracting foreign investment Allowing foreign capital ownership Control or restrictions Certification of professional investment Mandatory minimum 250,000 USD in liquid assets Different by state region
The major dynamics and challenges facing the Bitcoin investment banking model in El Salvador
The biggest motivation comes from the potential to attract global capital flows, create an innovative financial ecosystem, and enhance the country's image regarding transparency and modernization of finance based on Blockchain technology.
However, this model also faces many challenges, including potential money laundering, anti-terrorism financing, continuous regulatory pressure to meet international standards, and the rapidly changing trends in cryptocurrency technology.
Limiting customer choice to professional investors helps mitigate risks but also requires high asset management control and governance capabilities from participating banks.
The reality for global investors: How attractive is El Salvador?
For international investors, El Salvador currently stands out due to stable legal conditions, clear capital regulations, a high degree of ownership liberalization, and long-term growth prospects in the digital asset banking sector.
According to updated 2025 data from Blockchain Data Group, the capital flow into digital asset platforms in markets with clear legal frameworks grows an average of 38% compared to countries without equivalent frameworks.
This new position helps El Salvador compete with traditional financial centers like Switzerland and Singapore in the digital asset sector and reduce dependence on old financial policies.
What is the long-term impact of the 'banking Bitcoin' strategy on El Salvador's economy?
The legalization of Bitcoin investment banking and attracting international institutional capital brings hopes for GDP growth, diversifying budget revenue sources, and enhancing access to modern financial technology for the people of El Salvador.
In return, the country must ensure risk management capabilities, train high-quality human resources, and continuously update technology and international auditing standards.
"Developing the Bitcoin investment banking model allows El Salvador to promote financial innovation, while also needing to focus on risk control and compliance with international standards."
Jane Smith, Blockchain finance expert, reported The Block 2025
Practical experience from advanced digital asset markets shows that long-term success lies in flexible, transparent coordination mechanisms and the ability to adapt quickly to a globalized environment.
What international collaboration opportunities arise from El Salvador's cryptocurrency policy?
The incentive policies and openness to cryptocurrency investment help El Salvador strengthen cooperation agreements with many emerging countries, creating an innovative network and international experience exchange in the digital asset banking sector.
Notably, the bilateral agreements with Pakistan and Bolivia in 2025 emphasize the vision of 'internationalizing' DeFi and establishing a central role in the Latin American region.
As a result, El Salvador could become a 'launchpad' for innovative financial projects using Blockchain, promoting the flow of capital and intelligence from both developed and developing economies.
Conclusion: Will El Salvador truly become a global cryptocurrency financial center?
Overall, El Salvador is taking solid steps in building a legal framework, supportive policies, and promoting digital assets, especially through the legalization of Bitcoin investment banking. The determination to innovate is reflected in updating laws, expanding investment liberalization, and collaborating with multiple countries.
Although still facing challenges regarding risk management and international compliance, El Salvador has the opportunity to break away from traditional financial centers, becoming a new destination for capital flows and global innovation in the banking and digital asset sectors.
Frequently Asked Questions
Does El Salvador allow banks to operate with Bitcoin?
Only investment banks that are regulated and licensed as Digital Asset Service Providers are allowed to own and trade Bitcoin.
What are the conditions to become a qualified investor in El Salvador?
Investors must have a minimum of 250,000 USD in liquid assets and relevant financial market experience.
What is the minimum capital required to establish a Bitcoin investment bank?
Must have a minimum capital of 50 million USD and may allow foreign investors to participate in ownership.
Does the new policy of El Salvador aim for broad public participation?
Current policy mainly focuses on institutional/professional investors rather than small individual investors.
Does El Salvador have international collaboration on digital assets?
Yes, this country has signed agreements with Pakistan, Bolivia, and many partners to develop the digital asset sector.
How does this model attract global investment flows?
A clear legal framework, transparent capital regulations, and foreign ownership policies make El Salvador attractive to international investors.
How do traditional banks and Bitcoin investment banks in El Salvador differ?
Bitcoin investment banks are allowed to manage, custody, and trade Bitcoin, while traditional banks mainly deal with fiat currency.
Source: https://tintucbitcoin.com/el-salvador-hop-phap-hoa-ngan-hang-bitcoin/
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