Is bitcoin still legal tender in El Salvador?

What the law allows now

On 29 January 2025 El Salvador’s Legislative Assembly passed changes proposed by President Nayib Bukele, Decree 199, by 55 votes. Published the next day, they took effect 90 days later. The new Article 1 keeps the words “curso legal”, legal tender, but defines them as bitcoin’s unlimited power to settle payments “con aceptación voluntaria” (“with voluntary acceptance”), by people and fully private businesses only. The word “moneda”, currency, has gone.

Article 7 now says only people and private businesses “podrán aceptar Bitcoin” (“may accept Bitcoin”). The articles that let taxes be paid in bitcoin and made the state offer ways to pay in bitcoin and swap it for dollars were repealed. A new Article 12 says the state must pay its own debts in the currencies they were taken on in. The IMF’s board approved the loan on 26 February 2025.

The IMF and the National Bitcoin Office describe the result differently. The IMF said the reform removed “the concept of currency, as well as the essential features of legal tender”. Stacy Herbert, the office’s American director, said bitcoin would remain legal tender, though its use would be limited to private investment, EFE reported. Both fit the decree: the label is still there, but the duty to accept bitcoin is gone.

Why the law changed

The IMF lends to governments that run short of money, and it objected to the law from the start. In January 2022 its board “urged the authorities to narrow the scope of the Bitcoin law by removing Bitcoin’s legal tender status”, warning of risks to financial stability and to consumers.

On 18 December 2024 IMF staff and the government agreed a 40-month loan of about $1.4 billion. Its terms included: “Legal reforms will make acceptance of Bitcoin by the private sector voluntary,” and “Taxes will only be paid in U.S. dollars.” The government’s bitcoin dealings and its part in Chivo, the government’s wallet app, would be cut back.

What the 2021 Bitcoin Law required

On 5 June 2021 Bukele had said in a video shown at a bitcoin conference in Miami that he would send lawmakers a bill to make bitcoin legal tender. The Legislative Assembly passed his Bitcoin Law three days later by 62 votes of 84.

The law made bitcoin “moneda de curso legal”, legal tender currency, alongside the US dollar, which El Salvador had adopted in 2000. Article 7 was its core: “Todo agente económico deberá aceptar bitcoin como forma de pago” (“every economic agent must accept bitcoin as a form of payment”) when a customer offered it. That meant every shop and business, unless, under Article 12, it plainly had no access to the technology. Taxes could be paid in bitcoin too.

The state had to give people a way to pay in bitcoin and to swap it for dollars instantly, guaranteed by a trust at its development bank. Lawmakers set up that trust, Fidebitcoin, on 31 August 2021 with $150 million. The law took effect on 7 September 2021, when the government’s walletWalletAn app or device that holds your keys and makes, signs and sends payments. The bitcoin itself stays on the blockchain. app, Chivo, opened and offered $30 in bitcoin to everyone who signed up.

Why the government wanted bitcoin

The main argument was remittances: the money Salvadorans working abroad send home, worth about 23% of the economy by the IMF’s count. Bukele said bitcoin could save $400 million a year in fees. The law’s preamble gave a second reason: about 70% of Salvadorans had no access to traditional financial services, such as a bank account.

In El Zonte, a surf town where a donor-funded project had used bitcoin since 2018, one of its founders, José Roman Martínez, told The Guardian: “For many people, this is the first time they’ve received a digital payment.”

Businesses had to accept bitcoin, but they didn’t have to keep it: Chivo could turn a payment into dollars on the spot. On that basis Bukele, in a national address in June 2021, said using bitcoin would be optional. That choice over what to hold was different from a shop’s legal duty to accept a payment.

Did people use Chivo?

On launch day Chivo was missing from some app stores, then the government took it offline to add servers as sign-ups poured in. More than 1,000 people protested in San Salvador, burning a tyre and setting off fireworks in front of the Supreme Court, Reuters reported. The state had bought its first bitcoin the day before; by launch day, Bukele said, it held 550 bitcoins.

In January 2022 Bukele claimed four million Chivo users. Registration did not mean continued use. The economists Fernando Alvarez, David Argente and Diana Van Patten surveyed 1,800 households the next month: about 20% of respondents kept using Chivo after spending the sign-up bonus, mostly for dollars. Fewer than 10% continued using it for bitcoin. Only 20% of firms accepted bitcoin.

Later surveys also found little use. In its 2023 consultation, the IMF reported that 98% of businesses had never made a sale in bitcoin and less than 2% of remittances went through bitcoin providers. In the Central American University’s (UCA) poll at the end of 2024, 91.8% of people said they hadn’t used bitcoin that year.

What happened to Bitcoin City?

In November 2021 Bukele announced a Bitcoin City at the foot of the Conchagua volcano. Geothermal energy would power the city and bitcoin miningMinerA computer, or a pool of them, that bundles waiting transactions into blocks and secures the network, paid in new bitcoin and fees., and its only tax would be value-added tax. A $1 billion volcano bond would pay for it, with half the money turned into bitcoin, Samson Mow of the bitcoin company Blockstream said on stage.

The bond was repeatedly delayed. In December 2023 the National Bitcoin Office said it had regulatory approval and would be issued in the first quarter of 2024. A CoinDesk reporter who went looking for the city in early 2025 found “no signs of construction” near the volcano, though an airport was being built 30 minutes away. The IMF loan agreed that year bars the state from issuing or guaranteeing debt tied to bitcoin while it runs.

How much bitcoin does the government hold?

The state kept buying after the launch. “We are buying one #Bitcoin every day starting tomorrow,” Bukele posted on 16 November 2022, El Salvador time. When it approved the loan, the IMF put the state’s holdings at about 6,070 bitcoins, and said there would be “no voluntary accumulation of Bitcoins by the public sector” under the programme. On 4 March 2025 Bukele posted: “No, it’s not stopping.”

Since then the IMF and the National Bitcoin Office have given different accounts. In mid-2025 the IMF said that rises in the state’s holdings reflected “the consolidation of Bitcoin across various government-owned wallets”. The office kept announcing purchases, and on 28 August 2026 it posted: “EL SALVADOR JUST BOUGHT MORE BITCOIN”. Six days later, AFP reported, the government satisfied IMF staff that its continued purchases were paid for by private donations rather than public money.

On 1 October 2026 the IMF’s board said targets had been missed “on the Bitcoin accumulation front” and granted waivers. It added: “No further Bitcoin accumulation is envisaged beyond the documented donations.” It also said majority ownership and control of Chivo had passed to a private operator, which it didn’t name.

The public record gives a narrower answer. On 18 October 2026 the 20 addressesAddressA string of letters and numbers that tells someone where to send you bitcoin, a bit like an account number for one payment. listed on the National Bitcoin Office’s tracker held about 7,808 bitcoins. One of them had received 214 payments of exactly one bitcoin since 18 March 2026. The blockchainBlockchainBitcoin's shared record of every payment since 2009, stored in blocks that each link to the one before — which is what makes it a chain. shows when coins arrive, but not whether they were bought or given.