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El Salvador’s President Bukele Proposes Private Bitcoin Investment Banks

Nayib Bukele, Bitcoin, El Salvador

The pro-Bitcoin president of El Salvador, Nayib Bukele, is suggesting the creation of private investment banks inside the country. If allowed, these institutions will provide Bitcoin investors access to financial services free from more limitations than more conventional banks.

New Bitcoin-Friendly Financial Institutions Could Attract Global Investors

“As part of our economic plan for El Salvador, we propose a BPI, or Bank for Private Investment, where we can diversify the financing options offered to potential investors in dollars and bitcoin” the Salvadoran Ambassador to the United States, Milena Mayorga, wrote on June 14 on X. “Through more flexible financial services, this project seeks to draw in international investors.”

Senior Bitcoin advisor to Bukele, Max Keiser, added on the same day, “President Bukele hits the ground running in a new term with new legislation establishing a Bitcoin Bank” pointing out Ark Invest CEO Cathie Wood’s prediction that El Salvador’s real GDP could scale 10-fold during the next five years “has just become more likely.” Two weeks separate this development from Bukele’s swearing in for another five-year presidential term following a resounding victory in February.

Proposed BPI to Operate with Fewer Restrictions than Traditional Banks

El Mundo claims the BPI will not be subject to the same strict regulations as established banks. They will, for example, have no restrictions on interacting with foreign banks or finance firms linked to their shareholders or in a business group. Loan limits will also be dropped. The June 14 report further said: “Investment banks will also not be subject to the prohibition of ‘granting credit or assuming risks for more than 25% of their asset fund in relation to the same person.’”

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If accepted, the new private investments must be established with a minimum share capital of $50 million and call for at least two shareholders, who might be foreigners. A BPI might even seek permission to become a digital asset and Bitcoin service provider, running in any legal tender, including the United States Dollar and Bitcoin.

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Legislative Procedure and Possible Economic Effect

Under Bukele’s guidance, María Luisa Hayem, Minister of Economy for El Salvador, presented the revision to the Technology, Tourism, and Investment Commission. “The approval is still under review, though.” “The reform has not been approved; the legislators have not yet agreed to call officials to consult the objectives of the project nor have it voted in the Commission” it said.

By drawing international investors and using El Salvador’s pro-Bitcoin posture to stimulate economic development, this project might greatly change the financial scene of the country. The action aligns with Bukele’s broader strategy to position El Salvador as a leader in the bitcoin market, potentially leading to a ten-fold GDP growth for the country over the next five years.

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