El Salvador opens up new channels for encryption investment: Exclusive Bitcoin service licenses for high-net-worth and institutional investors.

The Legislative Assembly of El Salvador has officially approved the "Investment Banking Law", opening up exclusive encryption investment channels for high-net-worth individuals and institutional investors. The new regulations require a capital threshold of 50 million USD for institutions, while individual investors must have 250,000 USD in liquid assets and professional financial knowledge, aiming to attract international capital and create a regional encryption financial center. This move marks a shift in the country's Bitcoin strategy from retail popularity to institutional-level financial services.

( New Law Core: Institutional Exclusive Encryption Channel ) Three years after Bitcoin was designated as legal tender, El Salvador, which aims to incorporate retail users into the encryption ecosystem, is opening independent channels for high-net-worth individuals and institutional investors. The latest approved "Investment Banking Law" by the country's legislative assembly stipulates that licensed institutions with a capital of at least $50 million can provide services for Bitcoin and other digital assets. However, not everyone can access this channel.

( High Threshold Access: Definition of Mature Investors ) Access rights will be strictly limited to so-called "mature investors"—that is, individuals or entities with at least $250,000 in disposable funds and certified financial knowledge. Investment banks that meet the capital threshold will be authorized to issue bonds, arrange public-private partnerships (PPP), and provide or issue various digital assets including Bitcoin.

( Strategic Objective: Attract International Encryption Capital ) Lawmaker Dania González expressed that the goal is to "attract international private capital" and allow "funds and high-net-worth institutions to establish entities in the country or use our platform as a regional operating base." She added that this reform helps shape El Salvador into a regional professional encryption financial hub.

( Booker Power Consolidation Background ) This policy shift comes as President Nayib Bukele consolidates power domestically. Earlier this month, lawmakers approved a constitutional amendment that extends the presidential term from five years to six years and removes term limits. This move theoretically allows the self-proclaimed "Bitcoin evangelist" president to remain in power for decades.

( Bitcoin holdings mystery and IMF agreement ) Despite the agreement on a $1.4 billion loan with the International Monetary Fund (IMF), the Bukele government agreed to suspend public sector purchases of Bitcoin, but its reported Bitcoin holdings continue to grow. In the July "Article IV Consultation" report, the IMF stated that El Salvador complied with the requirement in the program to "cease accumulating Bitcoin" in the public sector.

( On-chain data differs from government explanations ) However, on-chain data from Arkham Intelligence shows that the government currently controls approximately 6,264 Bitcoins (valued at about $739 million at current prices), up from about 6,160 in April. Some analysts believe that the recent increase may only reflect internal transfers of Bitcoins between different government wallets rather than new purchases since the signing of the IMF agreement last December.

( licensing mechanism: overlay existing encryption license ) The new law approved by the Salvadoran parliament allows large financial institutions to apply for licenses to provide Financial Services denominated in Bitcoin and other digital assets to "mature investors." The law permits financial institutions with a capital of at least $50 million to apply to become investment banks (distinct from ordinary commercial banks). These investment banks may then apply for multiple overlapping encryption-related financial licenses to offer services to investors with liquid assets (which may include BTC) exceeding $250,000.

( Integration Application of Three Types of Encryption Licenses ) El Salvador has previously legislated to establish three types of encryption licenses: Bitcoin service providers, digital asset service providers, and digital asset issuers. The key point of the new law is to allow investment banks to overlay these encryption licenses on top of their existing banking licenses. In practice, this enables well-capitalized institutions to hold Bitcoin, issue tokens, and build encryption-related trading structures within the existing regulatory framework, without starting from scratch.

( improve the financial system architecture ) Gonzalez's representative stated in a press release: "The institutional framework of El Salvador's financial system will be expanded with the addition of a regulated and supervised entity, serving as a complement to the traditional banking system we are familiar with." The bill has received support from the Ministry of Economy of El Salvador.

( Strategic Shift: From Retail Compulsion to Institutional Attraction ) This move highlights a significant shift in the country's Bitcoin strategy - the focus has shifted from individual retail investors to large institutional capital. Although El Salvador mandated in 2021 that businesses accept Bitcoin payments, the country rescinded this mandate and other Bitcoin-related measures in the public sector in early 2025 to secure a $1.4 billion loan arrangement from the IMF.

( Retail adoption rate sluggish ) Despite the initial strong promotion, analysts found that the Bitcoin adoption rate among the people of El Salvador is very low: it is reported that only 1% of remittances involve encryption assets, and only two-tenths of Salvadorans said they have used cryptocurrency.

( Government Coin Purchase Statement Contradiction ) Despite the Bitcoin Office, overseen by President Bukele, continuously claiming to "buy 1 BTC daily," the president of the Central Bank of El Salvador and Minister of Finance indicated to the IMF in July that the country has not purchased any more Bitcoin since the loan agreement was signed. The IMF report pointed out that the apparent increase in Bitcoin holdings actually reflects the government's action of consolidating previously purchased Bitcoin from various wallets into a central "reserve" wallet.

(Conclusion) El Salvador has opened the door to cryptocurrency asset services for international high-net-worth and institutional investors through the Investment Banking Law, marking a new phase in its Bitcoin experiment that delves deeper into institutional-level encryption financial services. Against the backdrop of President Bukele consolidating power and adjusting strategies to balance IMF demands, whether the country can successfully transform into a regional encryption financial center and attract substantial institutional encryption capital inflows remains to be seen. The development of professional services such as Bitcoin bond issuance and digital asset custody under the new regulations will become key observation points.