While most countries were still debating the merits of cryptocurrency, El Salvador boldly jumped headfirst into the Bitcoin pool in September 2021. President Bukele‘s Bitcoin Law made the volatile digital asset legal tender alongside the US dollar. Bold move. Revolutionary, even. Merchants had to accept it—no ifs, ands, or buts.
Fast forward to 2025, and things look different. That mandatory acceptance? Gone. Turns out the IMF wasn’t thrilled about a country gambling with its fiscal health on crypto’s wild price swings. El Salvador had to tone down its Bitcoin enthusiasm to secure that sweet international financing. Money talks. Unlike proof of stake systems that offer energy efficiency, El Salvador’s Bitcoin mining consumed substantial power resources.
The crypto dream meets financial reality—El Salvador trading Bitcoin revolution for IMF approval.
The Chivo wallet rollout started with a bang—downloads galore. But usage? Not so impressive. The typical Bitcoin user in El Salvador? Young, male, educated, and wealthy. Shocking. About 70% of Salvadorans have dabbled in Bitcoin at some point, but only around 30% stuck with it. This 70% adoption rate represents a significant milestone for cryptocurrency in a national economy.
As for those remittances that Bitcoin was supposed to revolutionize? A measly 1% are processed through crypto channels. According to surveys, over 91% of Salvadorans still prefer using the US dollar over Bitcoin for their daily transactions.
Lightning Network wallets apparently outnumber bank accounts now. Progress? Maybe. But daily transactions remain underwhelming compared to the hype.
The government keeps insisting Bitcoin attracts foreign investment and improves financial inclusion. The Economist begs to differ, arguing the experiment has produced more costs than benefits. Ouch.
The most telling shift? El Salvador’s crypto revolution is now catering to the elite. The focus has moved from everyday Salvadorans to institutional players and the wealthy. New platforms offering synthetic assets, custody services, OTC execution, and tokenized instruments are emerging—services designed for sophisticated users with deep pockets.
