Banco Central de Reserva (BCR), the Central Bank of El Salvador, has issued draft regulations on how banks should handle Bitcoin.
On August 17th, two documents were issued for consultation to guide banks and financial institutions on how to provide bitcoin-related services to their customers.
This First, Titled “Guidelines for Operating Authorization of Bitcoin and USD Digital Wallet Platforms” (Spanish), according to the recently drafted Bitcoin Law, BTC is defined as legal tender. El Salvador’s legislature passed on June 9 And will see the country officially adopt digital assets on September 7.
This second The document titled “Technical Standards to Promote the Application of Bitcoin Law” is a longer, more detailed version of the first document.
The guidelines state that financial entities must apply to the central bank for digital wallets. The application must specify the type of product provided, and include detailed information about the target market, risk assessment, charges to customers, education regulations for customers, and complaint procedures.
Although it is not clear whether the national ID card used for basic bank accounts is sufficient for encrypted wallets, all customers need Know Your Customer (KYC) verification. Complete anti-money laundering (AML) procedures will also be applied, such as transaction monitoring and analysis.
A two-way exchange of Bitcoin to U.S. dollars must be provided and banks are allowed to charge fees.According to a translation Hosted by David Gerard, author of Attack of the 50 Foot Blockchain:
“The electronic platform used by digital wallet administrators must allow the central bank to access all information related to the operations performed in real time, as well as information requested by customers.”
All bitcoins held by banks and companies must be fully supported, not partial reserves. The U.S. dollar will be held by the central bank, while the BTC will be held by the custodian, and its services can be outsourced.
Article 29 of the second document requires banks or financial institutions to warn customers that Bitcoin is volatile and transactions are irreversible. If you lose your private key, you will lose BTC.
There are no regulations regarding accounting standards or standard government exchange rates for converting Bitcoin into legal tender, and vice versa.
On August 16, Fitch Ratings, the US credit rating agency, stated that The BTC adoption plan may negatively affect the credit of local insurance companies Due to volatility and risk concerns.