El Salvador is continuing its bitcoin plans, announcing the launch of what could be the world’s first bank built entirely around the scarce digital asset.
On August 8, the official Bitcoin Office posted on X: “Bitcoin Banks are coming to Bitcoin Country.”
No timeline or details were specified, nor has there been any comment from President Nayib Bukele. But the tweet has sparked a lot of speculation about how far the country will go in integrating bitcoin into its financial system.
El Salvador made headlines in September 2021 when it became the first country to adopt bitcoin as legal tender.
Since then, the country has rolled out the government-backed Chivo wallet, launched a geothermal-powered bitcoin mining project, and built national BTC reserves that now total around 6,264 BTC — worth over $730 million at current market prices.
The Bitcoin banks could be the next step in this strategy.
Officials and analysts think these institutions will offer deposits, lending and payments in bitcoin. This would make the South American nation the only country in the world with bitcoin deeply embedded in its core banking infrastructure.
Max Keiser, senior adviser to President Bukele and long-time Bitcoin advocate, called it unstoppable. He said bitcoin is absorbing the world’s $400 trillion in stored value and challenging the role of central banks.
This development seems to be connected to an earlier proposal for a Bank for Private Investment (BPI), first floated in mid-2024. That initiative aimed to create banks that could operate in U.S. dollars and bitcoin under a lighter regulatory framework.
Under the BPI proposal, banks would need at least $50 million in share capital and two shareholders. They could also register as digital asset managers and bitcoin service providers, with more freedom to partner with foreign banks and fewer restrictions on lending.
Whether the new bitcoin bank teaser is a direct extension of the BPI plan or a separate project is unclear. The BPI bill is still stuck in the Technology, Tourism and Investment Commission.
Not everyone is happy about El Salvador’s latest Bitcoin move. The International Monetary Fund (IMF) has been warning the country about the financial risks of heavy bitcoin use, citing its volatility and lack of consumer protections.
Related: El Salvador Continues Buying Bitcoin Despite IMF Deal
In January, El Salvador modified its Bitcoin law to get a multi-billion-dollar IMF-backed aid package.
The reforms removed the requirement for businesses to accept bitcoin and dissolved the Chivo wallet. Under a $1.4 billion credit agreement, the country agreed not to buy more BTC — and the IMF says they have kept that promise.
But the government keeps making announcements about buying more bitcoin. The IMF says most of them are internal wallet transfers, not new purchases. That has fueled public skepticism about the country’s bitcoin reserve management.
Analysts said the complex legal wording of the agreement has allowed El Salvador to abide by IMF regulations, and continue accumulating bitcoin at the same time.
Under the deal, the country should not use fiscal sector funds — core government treasury — to purchase bitcoin, which appears to be exactly what El Salvador is doing. It seems to be using private funds to build its treasury further.
The source of these “private” funds is unknown at this time. Whether this is true or just analysts’ speculation is yet to be seen.
The vision for Bitcoin banks is big, but there are many obstacles. The government has not published a detailed law yet, so it’s unclear how the banks will work, who will regulate them, and how customer funds will be protected.
Bitcoin’s price is another issue. Sharp movements can impact deposits, loans and overall bank operations. Although bitcoin is legal tender, most Salvadorans still use the U.S. dollar for everyday transactions, so adoption of bitcoin-based banking might be slow.
There are also trust issues. Some citizens are wary after controversies about whether the government’s reported bitcoin purchases are new or just wallet reorganizations.
