A Bitcoin bank to diversify economic opportunities in El Salvador

• The new bank will operate under less restrictive conditions, eliminating typical banking bans and lending restrictions.
• With a required capital of $50 million, the bank aims to attract significant foreign investments and stakeholders.

El Salvador, under the leadership of President Nayib Bukele, is considering the creation of a Bank for Private Investment (BPI), a move aimed at improving the country’s financial infrastructure for both traditional and digital currencies. This initiative, highlighted by the Salvadoran Ambassador to the United States, Milena Mayorga, aims to provide diversified financing options in US dollars and Bitcoin.

Details and implications of the proposal

On June 14, in the academic year statement about XMayorga outlined the BPI proposal, which is part of a broader economic strategy for El Salvador.

“As part of our economic plan for El Salvador, we propose a BPI, Private Investment Bank, where we can diversify the financing options offered to potential dollar and Bitcoin investors,” wrote the Salvadoran ambassador to the United States, Milena Mayorga, in a post published on June 14 on X.

This proposal comes shortly after President Bukele began his second presidential term, following his decisive election victory in February. The new bank aims not only to broaden investment opportunities, but also to integrate Bitcoin more deeply into the nation’s economic framework mentioned previously in cryptocurrency news flash.

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Max Keizer also said he was optimistic about the proposal. He referenced a forecast from Ark Invest CEO Cathie Wood that suggests El Salvador’s real GDP could expand significantly over the next five years, a prospect that the creation of a Bitcoin-focused bank could improve.

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Regulatory framework and flexibility

BPI would operate in a less restrictive regulatory environment than traditional banks. It would not be subject to typical banking prohibitions, such as limitations on interacting with foreign banks or financial entities associated with its shareholders. Additionally, the proposed bank would have no limits on the amount of credit extended or risks assumed regarding an individual customer.

BPI is expected to launch operations with a minimum share capital of $50 million and could have at least two shareholders, who could be international investors. This facility is expected to attract substantial foreign investment and support development of El Salvador’s financial services sector.

Digital and traditional currency operations

The bank is expected to handle dollar and Bitcoin transactions and could potentially receive authorization to operate as a digital asset and Bitcoin service provider. This dual capacity underlines that of El Salvador constant commitment to embrace bitcoin as a tool for economic development.

Current status and legislative process

At the moment the legislative process necessary for the establishment of the BPI is still in the preliminary stages. María Luisa Hayem, Minister of Economy of El Salvador, presented the proposal to the Technology, Tourism and Investment Commission. However, the proposal has not yet been approved. Lawmakers still must convene officials to discuss the project’s goals or bring it to a vote in committee.

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