El Salvador has approved new legislation that opens the door for major financial institutions to offer Bitcoin and other digital assets to institutional investors. This law, which was passed by the country's legislative council, allows financial institutions with a minimum capital of 50 million Dollar to qualify as investment banks.

These institutions can now apply for licenses to offer services denominated in Bitcoin and other cryptocurrencies to investors holding more than 250,000 Dollars in liquid assets.

The new framework is based on the current cryptocurrency regulations in El Salvador, which already allow companies to register as Bitcoin service providers, digital asset service providers, or digital asset issuers. The new legislation allows qualified investment banks to add these cryptocurrency licenses to their existing banking licenses.
In practice, it enables well-capitalized institutions to hold Bitcoin, issue tokens, and organize financial instruments related to cryptocurrencies without creating an entirely new regulatory system.

According to Deputy Dania Gonzalez, this reform will expand the institutional framework of the financial system in El Salvador by creating a new entity, but one that is regulated, working alongside the traditional banking sector. This legislation has received support from the Ministry of Economy, indicating the government's intention to attract larger capital into the digital asset ecosystem.