El Salvador continues its Bitcoin plan and has announced the launch of what could become the world’s first bank built around rare digital assets.
Official Bitcoin office posted on X on August 8th: “Bitcoin banks are coming to Bitcoin country.”
No timeline or details were specified, and there was no comment from President Nayib Bukele. However, the tweet sparked a lot of speculation about how far the country will go when integrating Bitcoin into the financial system.
El Salvador made the headline in September 2021 when it became the first country to adopt Bitcoin as its fiat currency.
Since then, the country has deployed government-supported Tibo wallets, launched geothermal-powered Bitcoin mining projects, building national BTC reserves of over $730 million at current market prices.
Bitcoin banks could be the next step in this strategy.
Officials and analysts believe that these agencies will provide Bitcoin deposits, loans and payments. This makes the South American country the only country in the world where Bitcoin is deeply embedded in its core banking infrastructure.
Max Kaiser, senior adviser to President Bukere and longtime Bitcoin advocate, called it unstoppable. He said Bitcoin absorbs the global $400 trillion preserved value and is challenging the role of a central bank.
The development appears to be related to the previous proposal of Banks for Private Investment (BPI) that first came to light in mid-2024. The initiative was aimed at creating banks that could operate in US dollars and Bitcoin under a lighter regulatory framework.
Under the BPI proposal, the bank will require at least $50 million with share capital and two shareholders. You can also register as a digital asset manager and Bitcoin service provider, providing more freedom to partner with foreign banks and less restrictions on lending.
It is unclear whether the new Bitcoin Bank teaser is a direct extension of the BPI plan or a direct extension of another project. The BPI bill still remains on the Technology, Tourism and Investment Committee.
Not everyone is happy with El Salvador’s latest Bitcoin move. The International Monetary Fund (IMF) has warned the country about the financial risks of Bitcoin use, citing its volatility and lack of consumer protection.
Related: El Salvador continues to buy Bitcoin despite IMF trading
In January, El Salvador changed its Bitcoin law to acquire a multi-billion dollar IMF back-aid package.
The reforms removed the requirement for companies to accept Bitcoin and dissolved Chivo wallets. Under the $1.4 billion credit agreement, the country agreed not to buy more BTC. The IMF says they are keeping that promise.
However, the government continues to announce that it will buy more Bitcoin. According to the IMF, most of them are internal wallet transfers, not new purchases. It has encouraged public skepticism about the country’s Bitcoin reserve management.
Analysts said the complex legal language of the agreement allowed El Salvador to comply with IMF regulations and continue to accumulate Bitcoin at the same time.
Under the contract, the state should not use the government’s Treasury, funding of the fiscal sector, to purchase Bitcoin, which looks exactly like what El Salvador is doing. It appears that they are using private funds to build more Ministry of Finance.
The sources of these “private” funds are currently unknown. Whether this is true or simply analyst speculation has not yet been seen.
Bitcoin Bank’s vision is big, but there are many obstacles. The government has not yet issued detailed laws, so it is unclear how banks will function, who will regulate them, and how client funds will be protected.
Bitcoin prices are another issue. A sharp movement can affect the operation of your deposits, loans and banks at large. Bitcoin is a fiat currency, but most Salvadorans still use the US dollar for daily trading, so adopting Bitcoin-based banking may be slow.
There is also the issue of trust. Some citizens are wary after the debate over whether the government-reported purchases of Bitcoin are new or simply wallet restructuring.
