El Salvador plans to introduce Bitcoin into the banking system

The government of El Salvador presented a proposal for reform and the creation of a private investment bank.

According to one of the recent posts written by Milena Mayorga, El Salvador's ambassador to the US, the proposed reform is mostly about allowing banks to operate with Bitcoin and dollars.

Therefore, if the proposal is accepted, the bank will be able to accept deposits as well as offer loans and other financial services using Bitcoin in addition to the US dollar.

A local media report states that this reform also aims to enable private banks to request permission to provide services related to digital assets and BTC.

The reform aims to create an appropriate legal framework for the country's private investment bank, which will help direct financial resources to business entities and government projects. The capital requirement for such banks is set at $50 million, while they may have foreign shareholders.

According to the report, unlike traditional banks, private investment banks could have less stringent regulations, such as lifting the ban on foreign related party contracts or lifting limits on credit concentration and limits on credit exposure to one borrower.

The Legislative Assembly has received but not yet approved the reform proposal in question.