El Salvador Launches Bitcoin Banks to Boost Crypto Integration
El Salvador plans to launch Bitcoin banks through its National Bitcoin Office, aiming to integrate digital assets with traditional finance. These Bitcoin banks, operating alongside existing services, will support BTC and USD transactions, require a minimum $50 million capital, and allow foreign shareholders. Building on the 2021 legal tender status of Bitcoin and the Chivo Wallet platform, the reform also loosens rules for private banks handling digital assets. Holding over 6 250 BTC (valued above $730 million) and pausing new purchases under an IMF agreement, El Salvador seeks to attract foreign crypto investment, expand financial inclusion, and strengthen its national Bitcoin reserves. Analysts cite volatility and regulatory risks but view the move as a potential model for crypto banking in emerging markets.
Bullish
The launch of Bitcoin banks creates a regulated on-ramp for BTC, boosts institutional capital requirements and opens foreign investment, all of which can increase demand and liquidity for Bitcoin. In the short term, volatility and regulatory uncertainties may persist, but the long-term effect of enhanced infrastructure and wider adoption is likely to support upward price pressure.