New technical rules for the Bitcoin law in El Salvador have been submitted for discussion by its Central Bank. The document seeks to clarify the rights and requirements for financial institutions seeking to provide bitcoin to dollars exchange services in the country after it officially becomes legal tender. Significant provisions include the extensive collection, storage, and report of customer data.
The published paper says it seeks to facilitate the establishment of bitcoin as legal tender in the country by providing guidelines on the rights and requirements for companies of the finance industry and their transactions.
Any financial institution that seeks to supply BTC/USD and USD/BTC exchanging services for Salvadorans would abide by the new rules, the document said. El Salvador’s central bank would require such companies to collect know-your-customer (KYC) information to conform with anti-money-laundering (AML) guidelines.
More specifically, the government would demand financial institutions providing bitcoin exchange and custody services to keep records of all transactions and their involved parties for 15 years, counted from the operation closing date. Additionally, the institutions will need to abide by international laws that allegedly seek to prevent money laundering and terrorism financing by establishing procedures to analyze every transaction. Providers also will need to report “suspicious” operations to the authorities, although the document didn’t provide many details on that classification.
However, the document apparently seeks to regulate only financial institutions that would venture into providing bitcoin exchange and custody services in El Salvador. It aims to establish a clear legal framework for companies that would like to provide similar functionality to the country’s own bitcoin wallet, that supports the exchange of dollars for bitcoin and vice-versa, as well as the custody of both currencies. Therefore, the proposed rules would not encompass developers, non-custodial wallets, and other Bitcoin services.