El Salvador’s President Nayib Bukele is pushing for the creation of private investment banks that will offer financial services to Bitcoin investors with fewer restrictions compared to traditional banks. This initiative is part of Bukele’s broader economic plan to enhance investment options in the country using both US Dollars and Bitcoin.
Proposal for a Bitcoin Bank
Salvadoran Ambassador to the United States, Milena Mayorga, announced the proposal on June 14 via X, explaining that the Bank for Private Investment (BPI) aims to diversify financing options for investors in both Dollars and Bitcoin. Mayorga stated, “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.”
Max Keiser, a senior Bitcoin advisor to Bukele, emphasized the significance of this proposal, noting that it aligns with Ark Invest CEO Cathie Wood’s prediction that El Salvador’s real GDP could increase tenfold in the next five years.
Legislative Context and Benefits
If the proposal is approved, the BPI will operate under more flexible regulations compared to traditional banks. According to a report from El Mundo, these investment banks would not be subject to strict banking laws, such as restrictions on dealings with overseas banks or finance companies linked to their shareholders. Additionally, loan restrictions, such as the prohibition against granting credit exceeding 25% of their Asset Fund to a single person, would be lifted.
Key Features of the BPI Proposal:
- Minimum Share Capital: $50 million
- Requirement: At least two shareholders, who may be foreigners
- Currency: Ability to operate in any legal tender, including the US Dollar and Bitcoin
- Potential: Approval to become digital asset and Bitcoin service providers
Current Status and Next Steps
El Salvador’s Minister of Economy, María Luisa Hayem, has proposed the reform to the Technology, Tourism, and Investment Commission under Bukele’s direction. However, it has not yet been approved. The legislative process is still in its early stages, and the commission has yet to call officials to discuss the project’s objectives or put the proposal to a vote.
Economic Implications
President Bukele, recently sworn in for a second five-year term, continues to advance his pro-Bitcoin agenda. This proposal reflects his commitment to integrating Bitcoin into El Salvador’s financial infrastructure, potentially positioning the country as a significant player in the global cryptocurrency market. If successful, the establishment of the BPI could attract substantial foreign investment and stimulate economic growth, fulfilling Bukele’s vision of a more prosperous and innovative El Salvador.
