El Salvadoran president Nayib Bukele is advancing a proposal that will create ‘Banks for Private Investment’ (BPI) offering increased financial services with fewer restrictions to Bitcoin and Dollar investors. Bukele has been a proponent of Bitcoin adoption in the country, making it BTC legal tender in 2021. In fact, El Salvador was the first nation to do so.
As his second presidential term rolls on, he is pushing for the introduction of BPIs working differently than the country’s traditional banks. If the proposal is passed, BPIs will emerge to offer novel financial services to its clients, enabling them to access asset types and products that the nation’s traditional banking services offer. Clients can avail of the services using assets like Bitcoin and other cryptocurrencies and the US Dollar.
Milena Maryoga, the Salvadoran Ambassador to the US, posted on X, “As part of our economic plan for El Salvador, we propose a BPI, Bank for Private Investment, where we can diversify the financing options offered to potential investors in Dollars and Bitcoin.”
BPIs will also not face the same stringency that traditional banks face during their setup and operations. They will observe massive leniency, like their board members, a minimum of two required while setting up, can be Salvadoran or foreigners.
Furthermore, they do not have to worry about interacting with other banks and financial companies linked to their shareholders. According to El Mundo — a Salvadoran newspaper, BPIs can also indulge in “granting credit or assuming risks for more than 25% of their Asset Fund in relation to the same person,” something that traditional banks cannot do.
These banks can further choose to operate as virtual asset service providers, like crypto exchanges and custodians, upon receiving the go-ahead from concerned authorities. Moreover, they are not limited to dealing with US Dollars or bitcoins during their functioning – they can choose to accept any global currencies.
While still a proposal, it can become a reality if the Technology, Tourism, and Investment Commission approves it. Clarification from the agency’s end is yet to come.