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El Salvador Cryptolicense: A Comprehensive Guide
In an effort to establish itself as a hub for cryptocurrency innovation, El Salvador has introduced a cryptolicense regime that allows companies to operate in the country’s digital assets market. The license is issued by two regulatory authorities - BCR and CNAD - and comes with various requirements and benefits.
Available Cryptollicenses
There are two types of cryptollicenses available in El Salvador:
- BSP License: This license is required for companies that provide various Bitcoin-related services, such as exchanging Bitcoins for fiat money, making Bitcoin payments or storing Bitcoins on behalf of clients.
- DASP License: This license is required for companies that provide various services related to other cryptocurrencies.
Requirements
To obtain a cryptollicense, companies must meet certain requirements, including:
- Maintaining an anti-money laundering (AML) program and know your customer (KYC) procedures
- Having a head of compliance who is a resident of El Salvador
- Maintaining accounting records and a register of complaints
- Having a cybersecurity program and physical security program tailored to the nature of services offered
- Having a resolution plan in place for insolvency
Benefits
The benefits of obtaining a cryptollicense in El Salvador include:
- Access to global markets
- Tax benefits, including exemption from taxes on capital gains and ordinary income derived from digital assets
- Trust from customers and investors due to regulatory oversight
Process
The process of obtaining a cryptollicense can take anywhere from a few weeks to a few months, depending on the completeness of documents submitted and the speed at which the application is processed.
Eligibility
Companies must have a minimum authorized capital of $2,000 (~1,800 €) and deposit 5% of this amount into a bank account at the time of registration. The remaining amount must be deposited within one year.
Advantages
El Salvador’s favorable regulatory climate, low taxes, strategic location, and government support make it an attractive destination for cryptocurrency companies.
Conclusion
Obtaining a cryptolicense in El Salvador can provide companies with access to global markets, tax benefits, and trust from customers and investors. With its innovative legislation and supportive environment, El Salvador is poised to become a major hub for cryptocurrency innovation.
Expert Insight
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