How El Salvador Made Bitcoin Legal Tender: What Thedex's Five-Year Research Found

Nearly five years ago, El Salvador did exactly that.

In September 2021, it became the first country in the world to make Bitcoin legal tender, under a law passed by El Salvador’s Legislative Assembly. The promise was ambitious: bring millions of unbanked citizens into the financial system, slash remittance costs, and turn the country into a
global crypto hub. Businesses were required to accept Bitcoin. The government launched its own wallet. The whole world watched.

Now, with nearly five years of real-world data available, the picture is far clearer — and that’s exactly why El Salvador matters far beyond Central America.

According to Chainalysis (2025), Ukraine ranks among the world’s most crypto-active countries, with particularly high levels of adoption relative to the size of its population. Combined with a diaspora that moves an estimated $9.5 billion across borders each year (FXC Intelligence), that makes Ukraine an especially interesting market to watch. As lawmakers work on the country’s crypto framework, a key question remains: what happens when crypto is used for everyday payments, not just transfers and investment?

El Salvador offers perhaps the closest thing to a real-world case study anyone is going to get. The experiment has already been run. The results are in. The lessons are worth paying attention to.

So, did Bitcoin become the payment revolution its supporters promised? Nearly five years later, the answer is surprisingly clear.

Thedex’s Take: What’s changed in El Salvador’s Bitcoin Law and its legal tender status since 2021

In January 2025, ahead of its IMF-backed program, El Salvador amended the Bitcoin Law, making acceptance by private businesses voluntary. The government still holds a substantial Bitcoin reserve, but under the program, it has committed not to voluntarily increase the public sector’s total holdings (IMF, July 2025). Either way, the bold headlines and big promises from
2021 have mostly faded into the background.

Timeline: El Salvador’s Bitcoin Law, 2021-2026

• 2021 — El Salvador makes Bitcoin legal tender under the Bitcoin Law, and businesses are told they have to accept it.
• 2024 — Adoption is still low, and talks with the IMF about a financing deal are underway.
• 2025 — El Salvador amends the Bitcoin Law in January (Asamblea Legislativa), with the changes taking effect in April, making Bitcoin acceptance optional for businesses.
• 2026 — Bitcoin use is still optional, and crypto remittances make up just 0,7% of the total.

Bitcoin by the numbers in 2026: how much is it really used in El Salvador

Here’s the reality check: according to data published by the Central Reserve Bank of El Salvador (BCR), remittances sent through digital-currency channels in the first half of 2026 added up to just $35.4 million — up 39,1% year-over-year, but still only about 0,7% of the more than $5 billion sent home overall.

• $35.4M — crypto remittances, H1 2026 (Source: Central Reserve Bank of El Salvador)
• 0.7% — share of $5B+ in total remittances (Source: Central Reserve Bank of El Salvador)

Despite the country’s high-profile Bitcoin policy, crypto remains a marginal channel for everyday money transfers.

Why Bitcoin never became a mass payment method despite its legal tender status

So why didn’t it catch on? The research paints a pretty stark picture:

• More than 60% of people who downloaded Chivo, the government’s wallet, never transacted again after spending their $30 sign-up bonus (Science, 2023)
• Just 8,1% of Salvadorans used Bitcoin in 2024 — down from 25,7% in 2021 (UCA IUDOP survey)
• 97.75% of businesses recorded zero Bitcoin sales, even though roughly 20% said they accepted it (IMF, 2025)

The Chivo wallet’s trust problem

Part of the problem was trust. In the weeks after Chivo launched, reports piled up of stolen ID numbers used to claim sign-up bonuses and of funds disappearing from wallets (CoinDesk, 2021) — including a wave of complaints that coincided with a server outage in December 2021 (The Block, 2022). That’s a rough first impression for a currency that was supposed to feel as easy as cash.

A law can make a payment method legal. It can’t make people trust it. That’s the bar any business adding a new payment option has to clear.

What El Salvador’s experience means for payment infrastructure

The same pattern shows up everywhere, once you look for it. Take Brazil’s Pix: it didn’t win people over just by existing — it settles payments in about 3 seconds on average, versus 2 days for a debit card (IMF, 2023), and it’s free for individuals. That combination of speed, reliability and zero cost is what actually drove adoption. Mobile money in Africa did the same thing. So did local wallets across Southeast Asia. People don’t switch payment methods because a regulator says so — they switch because the new option actually makes their life easier.

And whatever you’re adding — crypto, a local payment method, a new digital asset — the basics don’t change. It has to plug in fast, without forcing you to rebuild what already works. It has to route transactions smartly on its own. It has to recover when something breaks, without you scrambling. And it has to show you, clearly, what’s happening across every channel.

That’s where payment orchestration can play a role. Payment orchestration platforms are designed to help businesses add new payment methods, manage providers, and improve how transactions are routed across multiple channels. As the payments landscape continues to evolve, that flexibility can help teams maintain conversion rates, improve resilience, and manage operational complexity.

What El Salvador’s Bitcoin experiment teaches other markets

El Salvador’s experience shows a simple truth: people don’t adopt a payment method because they’re told to. They adopt it because it works for them.

Nearly five years after Bitcoin became legal tender, overall adoption has remained minimal, according to the IMF — most Salvadorans still rely on traditional payment methods. The lesson isn’t that crypto failed. It’s that adoption can’t be created by regulation alone.

For any country considering crypto payments today, the priority shouldn’t be mandates. It should be building services that are useful, reliable, and easy to use. When people see real value, adoption follows naturally.

FAQ: Is Bitcoin still legal tender in El Salvador?

Is Bitcoin still legal tender in El Salvador in 2026?

It’s complicated. El Salvador’s amended Bitcoin Law still refers to Bitcoin as legal tender on paper (IMF, 2025), but the 2025 reform stripped out what made that status meaningful in practice: businesses can now choose whether to accept it, and the public sector’s role in Bitcoin transactions has been scaled back. The IMF has described the reform as one that removed the practical characteristics of legal tender status, even though the law’s own text still uses the term. So it’s less a yes-or-no question than it looks.

What share of El Salvador’s remittances go through crypto?

Just 0,7%, as of the first half of 2026 — according to the Central Reserve Bank of El Salvador.

Why did El Salvador decide to legalize Bitcoin in the first place, back in 2021?

The pitch was financial inclusion and cheaper remittances for migrant workers sending money home — and to make that happen, the law required businesses to accept Bitcoin.

Does low Bitcoin usage mean crypto has no future in payments?

Not necessarily. If anything, El Salvador’s experience shows crypto tends to work best as one option among several — not as a full replacement for how people pay. And whether it works at all comes down to the infrastructure behind it.