Why is El Salvador known as the "Bitcoin Country"?

Despite being one of the smallest countries in Central America, El Salvador has launched a cryptocurrency revolution under the leadership of President Nayib Bukele. In addition to its bold move to make Bitcoin legal tender, El Salvador has launched a number of impressive initiatives to create an ecosystem that is open to cryptocurrencies, including:

The National Bitcoin Office (The National Bitcoin Office,ONBTC) was established to manage all projects related to cryptocurrencies.

The development of Chivo, an electronic wallet, has also laid 200 ATM machines supporting bitcoin exchange across the country, making it easy for everyone to integrate into the encrypted economy.

There are 6119.18 bitcoins in reserve so far, because Bukele promised in 2022 that "we will buy one bitcoin a day until the French currency can't be bought!"

Using volcanic geothermal to dig up coins, 300 mining machines have been set up in state-owned power plants, and about 473.5 bitcoins have been successfully dug up so far.

Plans to Issue $1 billion Bitcoin Volcano Bonds, Funds Raised to Build Dream "Bitcoin City"

Launch the "Citizenship by Investment" program, which means investing $1 million in Bitcoin or USDT to obtain a residency visa or citizenship in El Salvador.

From setting up proprietary institutions and laying infrastructure, to insisting on hoarding coins, using volcanoes to mine and issuing bonds to inject funds into the treasury, to launching innovative investment plans and building an encrypted community to attract global attention, El Salvador has become a new generation of financial centers.

Is El Salvador still an oasis for Bitcoin?

Although El Salvador's cryptocurrency regulatory policy has been controversial, and the above-mentioned series of incentives may not have a positive effect, and even recently canceled Bitcoin's legal tender status, El Salvador's carefully built encryption ecosystem has not disappeared. On the contrary, these efforts have established an extraordinary image for El Salvador, and "Bitcoin" has gradually become its logo and characteristic, which is attracting the attention of global investors.

On January 13 this year, stablecoin giant Tether dropped a blockbuster: After obtaining a digital asset service provider (DASP) license, the company will move its headquarters to El Salvador. Tether provides the answer-El Salvador, with its forward-looking policies, favorable regulatory environment, and growing Bitcoin community, has become an ideal location for companies leading the digital finance revolution. By embracing blockchain technology and digital currencies, El Salvador is nurturing an ecosystem that encourages innovation and welcomes investment, not only quietly reshaping the future of finance, but also making itself a key player in the global fintech space.

This is not an exception. OCEAN, a bitcoin mining pool, has already installed its new global headquarters in El Salvador, praising its great potential as an innovation center for bitcoin businesses.

At present, Bitcoin transactions in El Salvador are still very active. Whether it is consumers at home and abroad, from shopping malls, hotels, to the roadside to buy toast, or to spend at McDonald's and Wal-Mart, or even to pay for gas at gas stations, the daily transaction volume exceeds Thousands of transactions.

Cathie Wood, founder of ARK Ark Investment, has praised Bukele for using Bitcoin and AI to promote economic and educational reforms, and is expected to expand El Salvador's GDP tenfold during the current five-year term. Tim Draper, a well-known Silicon Valley venture capital godfather and founder of Draper Associates, also praised El Salvador's embrace of bitcoin, saying that El Salvador may become one of the richest and most innovative countries in the world within 30 or 40 years.

Not to mention the crypto-friendly environment in El Salvador after the EU's MiCA regulations came into effect, creating a huge attraction for virtual asset service providers (VASPs). Here, it is not only the testing ground of Bitcoin, but also the "oasis" of the future encryption industry ".

Salvadoran licenses save you big money?

For those who want to expand the encryption industry, El Salvador is not only synonymous with "encryption-friendly", but also has a solid hard-core advantage!

Applying for the relevant license in El Salvador is a very attractive fee, with a minimum equity of only $2,000-yes, you read that right! This is almost the rhythm of the "zero pressure" start. Compared with the tens of thousands of entry barriers in other markets, this is simply a paradise for small and medium-sized enterprises.

What's even more exciting is that El Salvador has tailored a set of "tax zero" super benefits for cryptocurrency companies. By registering as a member of the Digital Asset Service Provider Registry (RPSAD), you can enjoy the following tax benefits:

Corporate income tax exemption: ordinary enterprises have to face a 30% tax rate, while encryption companies directly "zero burden", all profits belong to you!

Tax-free gains on digital assets: Whether buying, selling, transferring, or holding digital assets, capital gains and daily income are all tax-free and earn as much as you earn.

Goods and Services Tax Exemption: Digital asset transactions are exempt from the transfer of goods and services tax, and the income of issuers, certifications, and service providers is also "tax zero".

Withholding tax exemption: RPSAD registered companies do not need to withhold tax for transactions, and cash flow is more free.

El Salvador BSP vs DASP license which is right for you?

Specifically, El Salvador offers two types of licenses-Bitcoin Service Provider (BSP) licenses and Digital Asset Service Provider (DASP) licenses. BSP and DASP licenses are like two different styles of "players", we can quickly understand from the following dimensions!

1. Scope of service: single vs multiple

The BSP license is only for the Bitcoin business ". You can use it to provide bitcoin exchange, payment processing, hosting services, etc., perfect for bitcoin-focused companies.

DASP license covers a wider range, in addition to bitcoin, but also can handle other such as Ethernet, Litecoin and other encrypted currency transactions, custody, derivatives, and even the issuance of stable currency, want to do the "all-round king" of the enterprise must be it.

2. Regulator: central bank vs special committee

BSP licenses are regulated by the Central Reserve Bank (BCR), and the approval process is more focused on the stability of the Bitcoin ecosystem.

The DASP license is the responsibility of the National Digital Asset Council (CNAD), which has a broader regulatory scope and focuses on the regulatory development of the entire digital asset market.

3. Applicable scenario: small and beautiful vs big and complete

The BSP license is closely linked to El Salvador's "Bitcoin Country" positioning and is suitable for players who dig deep into the Bitcoin market, such as companies that want to make Bitcoin payments or remittances.

DASP licenses are better suited for teams with diversified business ambitions, such as crypto exchanges, wallet service providers or projects planning to launch new tokens, and are better able to seize opportunities such as Altcoin or the blockchain boom.

4. Application Process: Streamlined vs Flexible

The approval of BSP license takes about 5.5 months, and the process is relatively streamlined, which is suitable for enterprises that want to invest quickly.

DASP license approval takes about 6 months, because it involves more complex business scope and higher compliance requirements, but it is also relatively more practical and flexible.

Cryptolicence to find a license application in El Salvador!

Whether you choose a BSP or DASP license, El Salvador welcomes you with open arms. This land has not only volcano and bitcoin, but also unlimited potential waiting for you to tap!

Applying for a licence is a critical first step towards success. From evaluating the suitability of BSP or DASP license, accurately calculating the application cost and time estimate, to forming a team that meets the compliance requirements, registering SRL company, drafting and revising the application documents, submitting materials until preparing for the interview, the assistance of the professional compliance team is very important in the face of a series of interlocking complex processes.

Cryptolicence is your most trusted partner! We provide you with full-chain support-through project management to help you plan a clear application path, material lifting to ensure that all documents are compliant and worry-free, simple rehearsals make you confident in the approval process, and additional customized services to meet your personalized needs, we make your every step worry-free and efficient!