El Salvador Proposes Bitcoin-Friendly 'Bank for Private Investments'
El Salvador's President Nayib Bukele has proposed a novel financial institution, the 'Bank for Private Investments (BPI)', designed to operate with fewer restrictions using dollars, stablecoins, and bitcoins. Targeting experienced investors, the BPI aims to boost international trade and attract global capital.
The BPI is intended for advanced investors with at least $250,000 in liquid assets or $500,000 in securities. It will offer financial services in both US dollars and bitcoin, with fewer restrictions than traditional banks. The proposal, sent to the National Assembly, seeks to exempt BPIs from credit restrictions and foreign banking relations laws, requiring a minimum capital of $50 million and at least two shareholders.
The BPI's ability to operate with bitcoin and stablecoins could establish cryptocurrencies as units of account for loans and credits, boosting international trade. This model could prove attractive to foreign investors and founders, aligning with Bukele's vision to transform El Salvador into a financial hub for the rich and a magnet for global capital, similar to small Asian and Central American tiger states and tax havens. The proposal was made by the Central American Bank for Economic Integration (CABEI), with support from the Government of Germany through KfW and the European Union.
The BPI, if approved, will introduce bitcoin and stablecoins as means of payment into El Salvador's official financial system, potentially transforming the country's financial landscape and attracting advanced investors.
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