El Salvador, a strong supporter of Bitcoin, has advanced further in integrating the cryptocurrency into its financial system by enabling banks to provide Bitcoin and other crypto-related services.
A recent press release announced that the country’s National Assembly has approved a new “Investment Banking Law,” which permits specialized institutions to include Bitcoin and other digital assets among their primary offerings.
What El Salvador’s Bitcoin Law Provides
Under the new framework, selected investment banks will be authorized to operate as official Bitcoin service providers, issuers, and digital asset managers. This enables them to offer services such as trading, custody, and issuance of Bitcoin, all regulated by the Central Reserve Bank (BCR) and the Superintendency of the Financial System (SSF).
The law is aimed at “sophisticated investors,” permitting individuals or companies with at least $250,000 in liquid assets to invest in Bitcoin, as well as other assets like tokenized gold and treasury bonds. Investment banking firms may also act as digital asset issuers, opening the door for regional companies to launch their own native tokens or crypto projects under the new regulatory framework.
El Salvador’s move to expand Bitcoin banking comes amid reports that the country plans to establish Bitcoin-focused banks, although official confirmation from authorities is still pending. This effort builds on El Salvador’s broader goal to cement Bitcoin as a key part of its financial system following its adoption as legal tender in 2021.
In addition, the country has steadily increased its Bitcoin holdings through a daily purchasing plan, now holding approximately 6,246 BTC, according to data from Bitcoin Treasuries by BitBo. President Nayib Bukele has emphasized the government’s long-term commitment to these reserves, with no intentions to sell or take profits anytime soon.
Despite these ambitions, growing resistance from global financial authorities is beginning to slow El Salvador’s Bitcoin initiatives and cast uncertainty over its future direction.
Growing Questions Surround El Salvador’s Bitcoin Initiative
A 2024 loan agreement with the International Monetary Fund (IMF) mandated that El Salvador revoke Bitcoin’s legal tender status and halt further BTC accumulation, delivering a significant setback to the country’s crypto strategy.
Although El Salvador continued to announce new Bitcoin purchases despite the restrictions, a July 2025 IMF review found that most of these reported acquisitions were likely internal wallet transfers rather than genuine new buys.
Adding further doubt, local crypto activists have highlighted inconsistencies between the government’s reported Bitcoin holdings and actual reserves, noting a lack of concrete evidence to support official claims. Officials maintain that a technical workaround allowed El Salvador to comply with the IMF agreement while continuing to accumulate BTC.
Despite the ongoing uncertainty, El Salvador remains steadfast in its pro-crypto efforts. Last month, reports emerged of a joint agreement between El Salvador and Pakistan to enhance collaboration on cryptocurrency, aiming to share expertise as part of a broader initiative to adopt digital assets.
In the same month, the country also signed a memorandum of understanding with Bolivia to promote mutual cooperation in developing crypto policies.
El Salvador’s recent Bitcoin banking law underscores its long-term dedication to the cryptocurrency and the wider digital asset industry. Whether the country will proceed with plans to establish a Bitcoin-focused bank remains to be seen.
