El Salvador’s Bitcoin banking regulations draft paper released

The central bank of El Salvador officially released a draft paper for the banks. This draft paper explained how the banks can offer digital assets services to their customers.

To introduce the Bitcoin law officially in El Salvador by the 7 September, authorities of Salvador are almost ready. A two document paper released by Banco Central de Reserva.

The draft paper released by El Salvador’s Banco Central de Reserva explained to the financial institutions how they can enable digital assets services to their customers.

The first document with the title ” Guidelines for the Authorization of Operation of the Digital Wallet Platform for Bitcoin and Dollars” is basically an order of the El Salvador government that said that “Bitcoin is a legal tender and Bitcoin law will come into effect from 7 September”.

The second document of the draft paper is a detailed version of the first document, where they explained the detailed procedure of how the banks of El Salvador may offer Bitcoin services.

According to the paper, any bank or financial entity can’t offer Bitcoin related digital services without approval. Every financial entity is required to apply to get approval from the central bank of El Salvador. And also they have to explain clearly  the services they will offer through any digital platform/wallet’s purpose and need.

And also all the financial institutions should have followed the KYC verification so that they can perfectly restrict the Money laundering activities or any unfair kind of activities.

In the Article 29 of the second document, they clearly mentioned that Banks are required to explain and inform all their customers that Bitcoin’s price is volatile which didn’t come under the control of any government authority. And also the transactions of Bitcoin are irreversible. The users who will lose their private key, will lose their Bitcoin too which is impossible to recover.

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