The Legislative Assembly of El Salvador recently approved a comprehensive investment banking law aimed at creating a new type of financial institution specializing in high net worth individuals and institutional clients. This initiative stems from last year ' s bill to establish a private investment bank that can handle bitcoin transactions and plans to provide investors with diversified sources of financing, as well as support for Bitcoin (BTC) and United States dollar (USD) deposits, loans and broader financial services.
This measure, which is supported by the Ministry of Economy, establishes a regulatory framework for investment banks that provide services such as asset management, financial advice, business transaction structure design, structured financing and market analysis. Investment banks are required to maintain a minimum equity of at least $50 million and operate independently of commercial banks. In addition, they may apply to become digital asset service providers, issuers of digital assets and Bitcoin service providers.
According to the legislator, this was intended to attract international private capital, financial groups and wealthy people to use El Salvador as their regional base of operations. The new law defines the client as a “skilled investor”, a person or entity with extensive market experience, a capacity to take complex financial risks and a current asset of at least $250,000 (including bitcoin, treasury bills, tokenized products, gold or cash).
The new bank would be allowed to conduct a variety of operations, such as bond issues, loans, foreign exchange transactions and supplementary services, and would be subject to the supervision of the Central Reserve Bank (BCR), which would set standards for capital, liquidity, risk management and the operation of digital assets. At the same time, the Financial System Supervisory Authority (SSF) monitors compliance, transparency and investor protection.
According to El Salvador's Legislative Councillor, Dana González, “Investment banks are essential to help Governments, companies and institutions raise the funds needed for major projects”. The law is expected to bring many benefits, from attracting foreign investment, international financial groups and high-value persons to positioning El Salvador as a regional financial centre. “We are transforming El Salvador into a professional financial hub, creating international reputation, institutional confidence and competitiveness.”