Adoption of Bitcoin in El Salvador
El Salvador adopted Bitcoin as a legal tender in 2021. The Bitcoin Law is relatively simple, establishing Bitcoin as a legal currency. However, following the law’s enactment, a regulation set additional requirements for companies providing services related to Bitcoin in El Salvador.
Registration with the Central Reserve Bank
The regulation mandates that companies offering services related to Bitcoin, such as exchanges, trading houses, electronic wallet services, or ATMs, must register with the Central Reserve Bank before starting operations. The registration process with the Central Reserve Bank is relatively straightforward, but several aspects need to be considered:
1. Resident Technical Contact in El Salvador:
Companies must have a technical contact person who resides permanently in El Salvador.
2. Company Registration:
There are no special requirements before the constitution for registering a company that will provide services related to Bitcoin. There should be no issues registering the company with the National Registry Center.
Supervision by the Financial System Supervisory Authority
The Financial System Supervisory Authority supervises companies providing services related to Bitcoin. Once they obtain registration with the Central Reserve Bank, they will receive a requirement from the Supervisory Authority which will include:
1. Compliance with Anti-Money Laundering Law:
This includes having a designated compliance officer and an alternate compliance officer, both certified.
2. Financial Investigation Unit Regulations:
Companies must comply with anti-money laundering policies, an annual training plan for all employees, and an annual work plan for the Compliance Office, among other requirements.
The National Commission of Digital Assets (CNAD)
As of 2023, the National Commission of Digital Assets (CNAD) was established. This commission is responsible for regulating and supervising companies that provide services related to cryptocurrencies other than Bitcoin. This means that there may be companies requiring registration with both the Central Reserve Bank as a Bitcoin service provider and the National Digital Assets Commission as a service provider of other digital assets, and in some cases, with both institutions.
Contact Us for More Information
If you need advice on registration and regulatory compliance for your Bitcoin-related service company in El Salvador, contact us today!
