El Salvador’s Bitcoin Banking Revolution: How Loans, Deposits, and Bank Powers Just Changed Forever
Banks in El Salvador just got a crypto-powered upgrade—whether traditional finance likes it or not.
The New Rules of the Game
Salvadoran banks can now process Bitcoin loans, accept BTC deposits, and operate with fewer restrictions than ever before. No more waiting for legacy systems to catch up.
Deposits Without Borders
Want to park your Bitcoin in a bank? Now you can—with the same protections (and risks) as fiat. Volatility warning: not for the faint-hearted.
Loans Get a Crypto Makeover
Need liquidity but only hold BTC? Borrow against it—because nothing says ‘modern banking’ like collateral that can swing 20% in a day.
The Fine Print
Regulators insist safeguards are in place. Critics whisper ‘reckless experiment.’ Meanwhile, Wall Street still charges $25 for wire transfers.
Love it or hate it, El Salvador’s betting big on Bitcoin—while the old guard counts its pennies.
What El Salvador’s Bitcoin law offers
Under the framework, select investment banks will be able to operate as official Bitcoin service providers, issuers, and digital asset managers. This greenlights services including trading, custody, and issuance of Bitcoin, under the supervision of the Central Reserve Bank (BCR) and the Superintendency of the Financial System (SSF).
The law targets “sophisticated investors,” allowing persons or companies with at least $250,000 in liquid assets to engage with Bitcoin, alongside assets including tokenized gold, and treasury bonds. Investment banking entities may also serve as digital asset issuer, suggesting that the companies in the region may launch their own native tokens or other crypro projects under the new regulatory standards.
El Salvador’s Bitcoin banking push comes amid reports that the country is looking to establish Bitcoin-focused banks, though authorities are yet to issue official statements in this regard. The broader trend builds on its bet to solidify Bitcoin as a major party of its financial system, since adopting the asset as a legal tender in 2021.
Alongside this, the country has consistently accumulated Bitcoin over the years, following a daily purchase plan that has brought its reserves to approximately 6,246 BTC, according to data from Bitcoin Treasuries by BitBo. President Nayib Bukele has reiterated the country’s commitment to holding these reserves long term, with no plans to sell or take profits soon.
However, recent pushback from global financial authorities now appears to be slowing El Salvador’s Bitcoin ambitions and clouding its future outlook.
Questions mount over El Salvador’s Bitcoin bid
A 2024 loan agreement with the International Monetary Fund (IMF) required El Salvador to end Bitcoin’s legal tender status and stop accumulating BTC, dealing a major blow to its bet on the crypto asset.
While the country continued announcing new purchases despite the ban, a subsequent July 2025 IMF review revealed that most of those claimed purchases were likely just transfers between wallets, not actual new acquisitions.
Adding weight to the idea, local crypto activists also pointed out discrepancies between the government’s claims and its actual reserves, saying the estimated holdings aren’t backed by solid proof, despite officials’ claims that a workaround allowed technical compliance with the IMF deal while continuing accumulation.
Despite the confusion and uncertainty, El Salvador has continued to push its pro-crypto campaign. Last month, reports surfaced that the country and Pakistan established a joint agreement to advance crypto collaboration, looking to exchange expertise in a broader push to embrace digital assets.
The country also signed a memorandum of understanding with Bolivia in the same month, aimed at facilitating a mutual cooperation in crypto policy development as it
El Salvador’s latest Bitcoin banking law reinforces its long-term commitment to the crypto asset and the broader industry, and it remains to be seen if the country follows through with plans for a Bitcoin-focused bank.
