3 months ago
22 ARTICLE AD
The proposed reform to El Salvador's Banking Law aimed at promoting economic growth and financial system competitiveness.
The government of El Salvador has submitted a reform proposal to create a private investment bank. Notably, the proposed reform targets enabling the bank to conduct operations in Bitcoin and the US dollar, said El Salvador’s Ambassador to the US, Milena Mayorga, in a recent post.
As part of our economic plan for El Salvador, we propose a BPI, Bank for Private Investment, where we can diversify the financing options offered to potential investors in Dollars and #Bitcoin. 🚀#BitcoinBank#EconomicFreedom https://t.co/3hfwVvTSeX
— Milena Mayorga (@MilenaMayorga) June 14, 2024
In other words, under the new law proposal, the bank can accept deposits, make loans, and potentially offer other financial services using Bitcoin alongside the US dollar.
In addition, the reform aims to allow private banks to seek authorization for digital asset services and Bitcoin services, according to a local media report.
The reform aims to create a legal framework for El Salvador’s private investment bank, facilitating the flow of financial resources towards businesses and government projects. As noted, the bank would require a minimum capital of $50 million and could have foreign shareholders.
“[The private bank] will only raise funds from so-called ” sophisticated investors “, to whom they will also be able to give loans if they present a guarantee,” the report noted. “Sophisticated investors are defined in the reform bill as those who have investment experience, assess risks and have freely available assets equivalent to $250,000 or $500,000.”
Additionally, compared to traditional banks, private investment banks would have fewer restrictions, such as lifting the prohibition on foreign-related contracts with affiliated entities or removing limitations on loan concentrations and credit exposure to a single borrower, according to the report.
The reform proposal has been received by the Legislative Assembly but has not yet been approved.
El Salvador has been at the forefront of Bitcoin adoption over the past few years. In September 2021, the country became the first to adopt Bitcoin as its legal tender.
Additionally, the country is mining Bitcoin using volcanic geothermal power, with nearly 474 Bitcoin mined as of May 15.
Under the leadership of President Nayib Bukele, a strong supporter of Bitcoin, El Salvador is expected to advance its pro-Bitcoin agenda, exploring ways to increase Bitcoin’s adoption and use in the future.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
Crypto Briefing may augment articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
