El Salvador passes law letting investment banks hold bitcoin, serve qualified clients

El Salvador's assembly approved a new law that will let large financial institutions apply for a license to offer financial services denominated in Bitcoin and other digital assets to "sophisticated investors." 

The law allows financial institutions with at least $50 million in capital to qualify as investment banks, which are regulated separately from typical commercial banks. Those investment banks can then apply for various licenses to offer crypto-related financial instruments to investors with more than $250,000 worth of liquid assets, which can include BTC. 

El Salvador's crypto license categories — allowing firms to register as a bitcoin service provider, digital asset service provider, or digital asset issuer — were established with prior legislation, but the new law allows investment banks to layer these licenses on top of their existing bank license. In practice, it lets well-capitalized institutions hold bitcoin, issue tokens, and structure crypto-linked deals within the current licensing regime rather than inventing a new one.

"The institutional architecture of the Salvadoran financial system will be expanded as a new, but regulated and supervised entity, complementary to the traditional banking system we are all familiar with," representative Dania González said in a press release. The law was backed by El Salvador's Ministry of Economy. 

From retail adoption to institutional investment

The move underscores a larger shift in focus away from individual retail investors and toward larger, institutional capital. Though El Salvador made it mandatory for businesses to accept bitcoin for payment in 2021, the country walked back the regulation and other bitcoin-related efforts by the public sector in early 2025 in order to secure a $1.4 billion loan facility from the IMF. 

Despite the initial push, analysts found low rates of bitcoin adoption by El Salvador's citizens, with only a reported 1% of remittances involving crypto assets and only 2 in 10 Salvadorans saying they've adopted cryptocurrency. 

Though the Bitcoin Office, overseen by President Nayib Bukele, continues to claim it's buying 1 BTC per day, El Salvador's central bank president and minister of finance told the IMF in July that the country hasn't purchased bitcoin since the loan agreement was signed. The IMF's report said the apparent purchases of bitcoin actually reflect accumulation from various government wallets, which had already purchased the bitcoin, into its central "reserve" wallet.