- El Salvador proposes that private investment banks offer Bitcoin investors more financial services with fewer restrictions.
- BPI will operate under different regulations, allowing more flexibility in financial dealings.
To give Bitcoin investors access to financial services with fewer limitations than traditional banks, the pro-Bitcoin president of El Salvador, Nayib Bukele, has suggested the creation of private investment banks.
This project is a component of Bukele’s larger economic strategy to give investors using both dollars and bitcoins a variety of funding choices.
June 14 saw the announcement of the Bank for Private Investment (BPI) plan by the Ambassador of El Salvador to the United States, Milena Mayorga. She underlined that the purpose of this action is to increase the financial options accessible to possible investors.
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
Senior Bitcoin advisor to Bukele Max Keiser further said that this new law is part of Bukele’s proactive strategy for his upcoming presidency.
Keiser also brought up Cathie Wood, the CEO of Ark Invest, who predicted that El Salvador’s real GDP might increase tenfold over the following five years.
Bukele’s New Term and Legislative Changes
This plan is being put out soon after Bukele started his new five-year term in February after winning the election handily. Different rules will apply to the BPI than to conventional banks.
El Mundo reports that there will not be any severe regulations limiting the BPI’s dealings with foreign banks or financial firms associated with its owners. The removal of lending restrictions will increase financial transaction freedom.
Additionally, investment banks, free from restrictions on lending money or taking on risks greater than 25% of their asset fund in connection with a single company, will benefit from this new idea.
These private ventures must have a minimum share capital of $50 million and two shareholders, one of whom may be a foreigner.
Operation in Legal Tender and Digital Assets
Operating in any legal currency, including the US dollar and Bitcoin, will be possible for BPIs. Additionally, they could ask for permission to start offering Bitcoin services and digital goods.
Under Bukele’s guidance, María Luisa Hayem, the Minister of Economy of El Salvador, presented this reform to the Technology, Tourism, and Investment Commission. It is still pending authorization, though.
“The reform has not been approved,” the article continued. “Neither have legislators agreed to call officials to consult on the project’s objectives nor have they put it to a vote in the Commission.”
Beside that, ETHNews reported in mid-May that El Salvador’s Bitcoin portfolio had surpassed $354 million thanks to geothermal energy from the Tecapa volcano.