El Salvador and Bitcoin: What the Legal Tender Law Did and What Changed

Key takeaways

• El Salvador’s Bitcoin Law took effect on 7 September 2021 and made bitcoin legal tender alongside the US dollar, which the country has used since 2001. Businesses had to accept bitcoin when a customer offered it.
• On 29 January 2025, under an IMF-supported program, the Legislative Assembly amended the law. Acceptance is now voluntary, only private parties may accept bitcoin, and taxes are paid in dollars only.
• The IMF’s February 2025 staff report called bitcoin use minimal. Official usage data is limited and mostly from the first years.
• Government holdings are hard to verify. As of October 2026 the IMF says accumulation since its June 2025 review came from documented private donations and that no further accumulation is expected.
• This article covers El Salvador only and passes no verdict on whether the policy worked. Everything is as of October 2026.

What did El Salvador’s Bitcoin Law do?

El Salvador’s Bitcoin Law, passed by the Legislative Assembly on 8 June 2021 and in force from 7 September 2021, made bitcoin legal tender in the country alongside the US dollar. The law was published in the official gazette on 9 June 2021 and took effect 90 days later. The dollar had been legal tender since 2001, and the IMF describes the economy as fully dollarized, so bitcoin was added next to a foreign currency.

Legal tender is a legal status: money that must be accepted to settle a debt. The original law went further than most definitions and told businesses they had to take bitcoin. A café owner in 2022 could not turn away a customer who offered to pay with it, unless the owner clearly had no access to the technology. Since January 2025 the owner can.

The text of the law and the IMF’s staff report allow a direct comparison.

The government also ran a public wallet app, Chivo, and gave Salvadorans an initial allowance equivalent to US$30 in bitcoin through it, according to the IMF.

Why did El Salvador do it, and why did critics object?

The government’s stated aims were financial inclusion and growth. The law’s own preamble says roughly 70 percent of the population had no access to traditional financial services, and that authorizing a digital currency valued only by the market would help raise national wealth. The IMF adds a second aim: making remittances, which its staff report puts at 23 percent of GDP, easier, faster and cheaper.

Critics focused on risk. In January 2022 the IMF’s Executive Board said that making a cryptocurrency legal tender carries large risks for financial integrity, financial stability and consumer protection, and can create fiscal liabilities. It urged El Salvador to narrow the law by removing bitcoin’s legal tender status, while allowing that a digital wallet could help inclusion. In short, the government pointed to access and growth, and the IMF pointed to stability and consumer-protection risks.

Which view was right is judged differently by different people, and this article does not rule on it. It reports what the official documents say.

What changed in 2025, and in what order?

In 2025 El Salvador made bitcoin acceptance voluntary, ended tax payments in bitcoin and confined the public sector’s role, changes the IMF listed as elements of a loan program. The dates below come from the Legislative Assembly’s decrees and IMF documents.

Is bitcoin still legal tender? It depends on the source. The amended Article 1 still uses the Spanish phrase for legal tender (curso legal), but defines it as voluntary acceptance by private parties only. The IMF’s staff report says the reform removed the “essential features of legal tender”. Press coverage at the time differed on whether the label survived, so the safest reading is the text itself.

How much was bitcoin actually used?

Official data is limited, and what exists says use was low. The IMF’s February 2025 staff report called bitcoin use minimal. It cited surveys from the peak of the project, which found that 20 percent of firms accepted bitcoin and 4.9 percent of sales were paid in it, with no evidence of bitcoin being used to pay taxes. It also said official data showed 1.2 percent of remittances going through a crypto wallet.

The report listed reasons for low use that include price volatility, especially next to the stability of the dollar, moderate mobile internet use and limited trust in the technology. A later IMF staff report, from the first review in 2025, noted that use for tax payments had been minimal before a regulation banned it.

Those figures are for the early period. We found no newer official survey, so treat any current usage claim, in either direction, as unverified. Why Is Bitcoin So Volatile? explains the volatility problem that holds back everyday payments anywhere, and How to Spend Bitcoin covers the practical routes.

What has the government done with its own bitcoin?

The government bought bitcoin and ran a very small mining program through the state electricity company, according to the IMF’s February 2025 staff report. That report put government holdings at 6,070 bitcoin, managed by a government agency, and a note in the same document gave 6,081 as of 24 February 2025. Treat those as dated snapshots.

Under the IMF program the authorities committed not to accumulate more. In June 2025 the IMF said holdings should stay unchanged, and its staff report explained small breaches of that commitment as a technical effect: Chivo’s own reserves did not adjust when customers’ bitcoin deposits fell.

In its release of 3 September 2026 the IMF said documentation showed that accumulation since the first review reflected private donations, with no public resources used. On 1 October 2026 it said certain performance criteria were not met, including on bitcoin accumulation, and granted waivers. It added that no further accumulation beyond documented donations is expected. Majority ownership and control of Chivo has passed to a private operator, and the September release says the government kept a minority stake and custody of customer assets.

Why are totals hard to check? Definitions matter. The program’s definition counts bitcoin in wallets owned or controlled by the public sector, including Chivo’s, net of customers’ bitcoin deposits in Chivo while the state takes part, so customer activity can move the measured total. The IMF itself lists better disclosure of public holdings as a priority. We therefore give no current total.

How should you read the El Salvador case?

Read it as a test of the gap between legal status and everyday use. A law can make bitcoin legal tender and even oblige shops to take it, but spending also depends on prices, trust, technology and what people already use, which in El Salvador was the US dollar. If you are new to the underlying ideas, the Start Here path lists the core guides, and What Is Bitcoin? covers the basics.

For the wider debate, see Bitcoin and Monetary Freedom and Bitcoin’s Role in a Changing Global Economy. To see what people do with bitcoin elsewhere, read What Is Bitcoin Used For?. A government wallet app also raises a custody question that Bitcoin Wallets Explained covers. For sourced figures on adoption in several countries, see Bitcoin Statistics 2026.

What to check next: the IMF’s El Salvador page for future reviews and staff reports, the Legislative Assembly’s decrees for any further change to the Bitcoin Law, and the government’s published wallet addresses for holdings. Laws and programs change, so this page reflects October 2026 only. For decisions about your own money, speak to a qualified professional.

Where to go next

• What Is Bitcoin Used For? Real-World Uses and Their Limits: where payments fit among the other uses.
• How to Spend Bitcoin: Paying With It, Cards and Taxes: the real routes for paying in bitcoin.
• Bitcoin and Monetary Freedom: the argument about money, states and individual control.
• Bitcoin Statistics 2026: Verified Data on Adoption, Security, Mining and Regulation: dated, sourced figures.