A legislative vote held in June 2021 granted bitcoin official currency status in El Salvador, placing it alongside the U.S. dollar under a measure passed by an assembly where President Nayib Bukele's party, New Ideas, held a majority — making the country the first to extend legal-tender recognition to the cryptocurrency.
Framed around goals of "prosperity, economic freedom and financial inclusion," the policy carried additional aims of attracting foreign capital and drawing wage earners in the informal sector into the formal banking network. That objective carried considerable weight given that remittance flows, per Central Reserve Bank figures, reached 26.3% of gross domestic product in 2025, a share representing close to one quarter of the entire national output.
A $150 million trust was established at rollout, alongside a $30 per-person payment offered to residents who installed the Chivo Wallet application on their phones. A separate sum of 50 million dollars went toward setting up ATM networks and covering related logistical needs. Passage of the law and establishment of the trust were among the mechanisms put in place toward that goal, even though earlier surveys had recorded considerable public scepticism toward the initiative.
Nine months after the policy took effect, a poll conducted by the University Institute of Public Opinion (Iudop) at the Central American University José Simeón Cañas (UCA) found that 71% of respondents reported no improvement to their household finances. A separate April 2022 study from the National Bureau of Economic Research — a private, non-profit organisation based in the United States — found that most users who downloaded the Chivo Wallet stopped using it once the government's initial bonus had been exhausted.
Throughout that stretch, state-backed acquisitions of the cryptocurrency continued under Bukele's direction, even as observers in financial analysis raised concerns about digital-asset price swings posing a measurable risk to government funds — a point given added weight by the token losing more than 60 percent of its worth across 2022.
The Digital Asset Emission Act, a piece of legislation voted through by the Assembly in January 2023, was designed to draw overseas investment into the jurisdiction. Under the legislation, a debt instrument dubbed "volcano bonds" could be floated on international capital markets, with bitcoin serving as the underlying collateral rather than conventional assets. Proceeds from the bond issuance were to be divided equally — one portion directed toward acquiring additional bitcoin, the other earmarked for developing a planned urban settlement at the base of Conchagua volcano, a project to be called Bitcoin City, where heat drawn from the volcano's geothermal activity would supply the electrical power driving the computer infrastructure dedicated to minting new units of the cryptocurrency.
Data gathered by CID-Gallup around 2022 showed that roughly one in five businesses had adopted bitcoin as a payment option, while cryptocurrency accounted for just 5% of tax transactions. By 2024, cryptocurrency use in the country had remained limited in practice, concentrated largely around El Zonte — the coastal community known as Bitcoin Beach — and Bukele told Time magazine that August that uptake of the digital currency had fallen short of what he had anticipated.
According to Iudop polling released in January 2025, roughly nine in ten Salvadorans had gone through the entire prior year without touching the cryptocurrency, and among that group, more than three-quarters reported having never used it at any point. According to the World Bank's Global Findex 2025 survey, around four in ten Salvadorans aged 15 or older held a formal bank account — a rate that, while reflecting documented gains in financial access, still places more than half of the country's adult population outside the banking system.
Facing a challenging economic backdrop, the government secured a $1.4 billion financing arrangement with the IMF in December 2024, with the fund attaching a requirement to reduce exposure to bitcoin-related risks — a condition that prompted the Legislative Assembly to amend the existing Bitcoin Law. Six articles were amended and three others struck from the text entirely, stripping the digital currency of its status as an officially recognised medium of exchange and shifting its use from an obligation to an option.
During the third loan-compliance review that September, controlling ownership of the state-backed digital wallet known as Chivo Wallet passed into private hands — with Linguard Labs later named as the acquiring entity — though neither the ownership share involved nor the financial terms of the deal have been disclosed. El Salvador's government is set to keep its position as both a shareholder and a partner in the arrangement.
Releasing the $138 million tranche, the fund's accompanying statement clarified that any bitcoin held by El Salvador had come through private donations rather than public expenditure, and that the government had undertaken not to add further holdings — a position the fund summarised by noting that no accumulation beyond those donated amounts was anticipated going forward. No public record exists of who contributed funds or in what amounts.
Central Reserve Bank of El Salvador data for the January–April 2026 period place cryptocurrency wallet transfers at 0.7 percent of total remittance flows, a slice amounting to US$23.1 million and running 44.3 percent ahead of the comparable figure from the year before, against an aggregate remittance volume of US$3.286 billion across those months. Frank Muci, a researcher at the London School of Economics and Political Science, contended that the policy rested on a misreading of the problem, pointing to cash-based sending in the United States and a preference for cash collection at the receiving end as the primary drivers of remittance costs, and he described the initiative as a "gran nothing burger," adding that shifts in tourism were more attributable to security policy than to bitcoin uptake. Separately, Carlos Acevedo, a former governor of the Central Reserve Bank of El Salvador, told a news outlet that the government's stated expectation — that broad bitcoin use would be evident by this stage — had not materialised.
Data released by the National Bitcoin Office put the nation's digital-asset holdings at 7,798.37 bitcoins — a stockpile valued at around US$636 million as of the latest available reporting period. As of the time of reporting, volcano bonds remain unissued and the groundwork for Bitcoin City has yet to be laid.
Samson Mow, the JAN3 executive who put forward the volcano bond concept, told a broadcast outlet that the digital asset framework had allowed a regulated and expanding industry to take shape, while also noting that persuading other nations to move in the same direction had proved harder in practice than it appeared on paper — a lesson drawn from El Salvador's experience — because even governments holding substantial political authority cannot compel citizens to adopt a technology on their own.
Muci told a broadcast outlet that the arrangement mattered as a demonstration of hyperbitcoinization — the concept of bitcoin displacing state-issued currency. Acevedo noted that, although returns fell below what the government had anticipated, the gap between actual performance and what a comparable market investment might have yielded was narrower than the figures might initially imply.
