El Salvador’s New Law Targets Wealthy Bitcoin Investors

San Salvador, El Salvador — El Salvador is positioning itself to attract wealthy investors in the cryptocurrency market with a new investment banking law. Approved by the Legislative Assembly, this law allows licensed institutions with at least $50 million in capital to provide services related to Bitcoin and other digital assets.

The legislation, designed for “sophisticated investors,” requires individuals to have at least $250,000 in liquid funds and accredited financial knowledge. This restriction aims to create a niche for high-net-worth and institutional investors in the country’s growing crypto sector.

Lawmaker Dania González highlighted that the reforms intend to attract international private capital and establish El Salvador as a specialized financial hub in the region. She stated, “Funds and high-net-worth actors can set up in the country or use our entities as regional platforms.” This initiative follows El Salvador’s earlier decision in 2021 to make Bitcoin legal tender.

President Nayib Bukele, who is entering his second term after his re-election in February, has been accused of consolidating power. Earlier legislation extended presidential terms from five to six years and abolished term limits, which could enable Bukele to remain in office for many years.

Despite entering a $1.4 billion loan agreement with the International Monetary Fund (IMF), Bukele’s administration has expanded its Bitcoin holdings. Recent blockchain data from Arkham Intelligence shows that the government now controls approximately $739 million worth of Bitcoin, reflecting a significant increase since April.

Some analysts believe this rise in holdings could be due to movements between wallets rather than new acquisitions, given the terms of the IMF agreement reached in December. The developments in El Salvador’s financial regulations signal the country’s ongoing commitment to integrating cryptocurrency into its economy.