El Salvador has affirmed that it will launch Bitcoin banks, marking the next stage in its effort to make its economy crypto-based.
The government’s decision supported President Nayib Bukele’s existing strategy of using Bitcoin; however, a regulatory framework remains unannounced.
The news indicates that special banking institutions are likely to work with Bitcoin soon. Should the move materialize, this could disrupt the way Salvadorans receive financial services, although the majority of the population is not banked in the country.
Bitcoin-Focused Banks Under Consideration
The proposal of Bitcoin-only banks furthers the government’s crypto-friendly policy. Banks might support Bitcoin-based services such as savings accounts, lending, and various investment tools. Although the outline lacks detail, the proposal has the potential to transform the avenues of financial access in the country, where the number of citizens without banked access is close to 70 percent.
This can be attributed to Bukele’s prior proposal to establish a Bank of Private Investment (BPI). This model would enable new financial institutions to work under relaxed regulatory conditions compared to traditional banks. The BPI can also facilitate collaboration with overseas banks and present more exploitative policies.
Bukele’s BPI Vision Gains New Momentum
The other recent concept initiated last year, the BPI concept, has comparative requirements of a minimum share capital of 50 million dollars and less than two shareholders. Such establishments could open accounts with the status of Bitcoin service providers and digital asset administrators. The country’s ambassador, Milena Mayorga, described the model as providing greater international reach and reduced levels of regulatory friction.
The Technology, Tourism, and Investment Commission is also investigating the BPI proposal. The recent announcement suggests that more than the initial BPI idea will be launched, but again, no official information has been announced.
International Scrutiny and Economic Expectations
The Bitcoin plans of President Bukele are still a source of attention in the world. An issue of concern raised by the IMF is the instability surrounding crypto and the non-existence of consumer protection. Within the framework of a credit agreement for 1.4 billion dollars, El Salvador undertook not to purchase additional Bitcoin. IMF denied such claims by the government and cited recent swap movement as internal transfers instead of new Bitcoin purchases.
Warnings aside, authorities such as Max Keiser are certain that Bitcoin’s banking has the potential to boost GDP. Due to this financial shift, Cathie Wood of Ark Investment has forecasted healthy economic growth in the next five years.
The value of Bitcoin in El Salvador recently reached a record high of 767 million. The country has also invested in geothermal-powered mining and a state-owned crypto wallet system.
