Bitcoin in El Salvador.
What actually happened after the legal-tender law.

Section 1 · The Bitcoin Law

Decree 57 (Bitcoin Law) passed in June 2021 and took effect September 7, 2021. It made Bitcoin legal tender alongside the US dollar (El Salvador uses the dollar as its primary currency, having dollarized in 2001). The law required all businesses to accept Bitcoin as payment verify×DON'T TRUST, VERIFYClaim: El Salvador's Decree 57 made Bitcoin legal tender alongside the US dollar starting September 2021.Verify at: El Salvador Legislative Assembly ↗The law was the first of its kind anywhere. Subsequent amendments in 2025 changed acceptance from mandatory to voluntary..

The Chivo Wallet: government-issued Bitcoin wallet with $30 signup bonus for Salvadoran citizens. Approximately 4 million downloads in the first month.

Section 2 · What the data shows

Chivo adoption

Usage fell significantly after the initial bonus was claimed. NBER Working Paper 30526 (Alvarez et al.) found that most users who received the $30 bonus converted it to dollars immediately, and continued usage was modest verify×DON'T TRUST, VERIFYClaim: NBER Working Paper 30526 (Alvarez, Argente, Van Patten) studied Chivo adoption.Verify at: NBER WP 30526 ↗The paper documented adoption patterns and conversion behavior in the early months after launch..

Remittances

El Salvador receives a significant share of GDPGross Domestic Product (GDP)The total value of all goods and services produced in a country in one year. in remittances from Salvadorans abroad. Bitcoin's share of those remittances has remained small. Most remittances continue through traditional channels (Western Union, MoneyGram, bank transfers). The Bitcoin angle was a stated motivation for the law, but the empirical impact has been modest.

Bitcoin City project

Announced but construction has not been substantively begun. Volcano-bond financing for Bitcoin City did not materialize as initially proposed.

Section 3 · The IMF agreement (January 2025)

In January 2025, El Salvador reached a $1.4 billion loan agreement with the IMF. As part of the agreement verify×DON'T TRUST, VERIFYClaim: El Salvador reached a $1.4B IMF agreement in early 2025 that modified Bitcoin's legal-tender status.Verify at: IMF El Salvador ↗IMF press releases document the conditions and timing of the agreement.:

• Bitcoin acceptance was made VOLUNTARY rather than mandatory for businesses.
• The government reduced direct Bitcoin exposure on its balance sheet.
• Some Bitcoin treasury holdings were maintained.
• Tax payments in Bitcoin are no longer required to be accepted by all businesses.

Section 4 · The honest assessment

What worked

• A sovereign nation can adopt Bitcoin without economic collapse.
• Bitcoin remittances work technically. They are cheaper and faster than traditional channels for those who use them.
• International attention and Bitcoin tourism generated real economic activity.
• Bukele's approval ratings remained high throughout the experiment.

What did not

• Adoption for everyday payments was lower than expected.
• The IMF retains significant leverage over small debtor nations.
• Mandatory acceptance without organic adoption created friction rather than utility.

The broader lesson

Institutional pressure (IMF, World Bank) shapes what is possible for nations dependent on international financing. Grassroots Bitcoin adoption in places like Bitcoin Beach (El Zonte) predated the legal-tender law and survived the political changes. The peer-to-peer protocol works regardless of legal-tender status.