El Salvador’s Bitcoin adoption is expected to become official in less than three weeks, and the government has now published a draft to guide banks on how to handle the cryptocurrency.
El Salvador Publishes Banking Regulations For Bitcoin
The El Salvador central bank, Banco Central de Reserva (BCR), has published two documents designed to help financial institutions in the country deal with Bitcoin. The guidelines would make it easier for banks to understand how to offer Bitcoin-related services to their customers.
The first document roughly translates as “Guidelines for the Authorization of Operation of the Digital Wallet Platform for Bitcoin and Dollars.” The document defines Bitcoin as a legal tender after the legislation was passed a few months ago. Following the approval of the bill, Bitcoin is set to become an official legal tender in El Salvador on September 7.
The second document is called Technical Standards to Facilitate the Application of the Bitcoin Law,” and it contains details on how financial institutions and banks should offer Bitcoin services to their customers.
Per the regulation, financial institutions would have to apply to the El Salvador central bank if they wish to offer digital wallets. Furthermore, the applications are required to contain details on the type of products the banks would be offering, the target market, risk assessments, charges to customers, various complaint processes and education resources for the customers.
The banks would make it easy for people to convert Bitcoin to US Dollars and vice versa. The financial institutions are also required to ensure customers go through the standard Know-your-customer (KYC) verification processes. They also need to implement anti-money laundering (AML) procedures when dealing with Bitcoin.
Bitcoin’s Use Is Optional
El Salvador’s finance minister Alejandro Zelaya pointed out earlier this week that the use of Bitcoin is totally optional. According to the minister, the US Dollar remains the dominant currency in El Salvador, but Bitcoin is available as an option for people that want to use it.
Bitcoin has been in a bearish mode for the past few days, with its price down by 0.67% over the past 24 hours. Currently, Bitcoin is trading just above the $44k mark, dropping from the $47k level it attained during the weekend.