El Salvador plans to launch Bitcoin banks by late 2025, boosting digital finance with innovative crypto services and regulatory support.
El Salvador has taken another bold step in its journey toward becoming a digital finance leader. On the fourth anniversary of its historic Bitcoin Law, officials revealed that Bitcoin banks will start operating this time by the end of 2025. This announcement follows the approval of the Investment Banking Law in August and is part of a larger effort to transform the national financial system.
Bitcoin Banks Regulated by Commission of Digital Assets, Not Traditional Authorities
To start with, the news was brought by Stacy Herbert, who is head of the National Bitcoin Office (ONBTC). She made the announcement when she opened the new Bitcoin Zone in the National Library. Due to this, Herbert explained that Bitcoin banks are predicted to start operating later this year. She stated that a lot of citizens have voiced their frustration with the banking system in place. According to her, the new banking model is meant to address those age-old issues.
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The recently passed Investment Banking Law forms a unique structure for Bitcoin banks. These institutions will not be operating under the traditional financial regulator, the Superintendency of the Financial System. Instead, they will be monitored by the Commission of Digital Assets (CNAD). This new category provides more flexibility and innovation in financial services where the focus is on digital assets.
Unlike traditional banks, Bitcoin banks will serve clients who have high net worth, as well as crypto businesses. Each bank should have a minimum capital of $50 million. Clients have to demonstrate that they have at least 250,000 in liquid assets, such as cash, Bitcoin, or tokenized gold. This means that the institutions are targeted at well-funded investors and fintech start-ups instead of the general public.
In addition, these banks will provide services geared towards digital assets. They will accept deposits in bitcoin or tokenized US dollars. Crypto holdings will secure loans, and they will be able to offer them secure storage via digital custody services. Other features will be wallet management, token issue, and investment services.
Public Adoption of Crypto Projects Slower but Officials Remain Optimistic
To operate within legal boundaries, Bitcoin banks must obtain a license as a Digital Asset Service Provider (DASP). Juan Carlos Reyes, president of the CNAD, said the framework is aimed at attracting foreign investors. He believes that it will make El Salvador a regional hub of digital finance. The national reserves of Bitcoin in the country, which now exceed 6,300 BTC of a value of more than $700 million, reinforce this position.
However, there are risks. The International Monetary Fund has expressed concern about the volatility of crypto. In 2024, an agreement was reached to restrict the purchase of Bitcoin in return for a loan of $1.4 billion in exchange. Despite this, President Nayib Bukele is still committed to the Bitcoin strategy. With almost 70% of the population still unbanked, Bitcoin banks can provide financial accessibility through other means.
In addition to this, the plan supports wider crypto projects already underway. These include the geothermal-powered bitcoin mining program as well as the government-backed Chivo wallet. Though public use has been slower than expected, officials are optimistic. Supporters believe that the country is laying the foundation for long-term innovation.
In conclusion, the introduction of Bitcoin banks is a new chapter in El Salvador’s digital transformation. With a strong legal support system and a focus on crypto finance, the country is positioning itself as a leader in the global digital economy. Despite issues, the dedication to innovation is still alive and well.