Bitcoin: Bukele's El Salvador Shifts to Stablecoins

New monetary bet in San Salvador. El Salvador is turning to dollar-backed stablecoins to circulate money in its economy, five years after granting legal tender status to Bitcoin. Since the adoption of Bitcoin, President Nayib Bukele's government has not sold any of the bitcoins accumulated by the state.

The country has been dollarized since 2001 and received nearly 10 billion dollars from its diaspora in 2025. Stablecoins are arriving precisely where Chivo Wallet has stalled. According to Bloomberg, the vehicle for this shift is now called Sivar: a state-backed application built with the startup Modveon, which circulates digital dollars on Coinbase's Base network.

Key Points

• The mandatory legal tender status of bitcoin jumped in January 2025, a condition set by the IMF for a 1.4 billion dollar loan.
• Tether has set up its headquarters in San Salvador after obtaining a digital asset provider license from the local regulator.
• The Salvadoran state retains its BTC reserve, now close to 7,800 units, and the public dashboard continues to rise despite IMF requests.
• Remittances from the diaspora, nearly 10 billion dollars in 2025, are the target of the stablecoin pivot.
• Sivar, revealed by Bloomberg, promises a $2 fee to send any amount from the United States.

El Salvador Stores Its Bitcoin Experience and Bets on Stablecoins

It all began on September 7, 2021, when El Salvador became the first country in the world to make bitcoin a legal currency. To stimulate adoption, every citizen who downloaded the public Chivo wallet received 30 dollars in BTC. Merchants were required to accept payment in bitcoins, and the state promised fee-free transfers for expatriate workers. However, enthusiasm did not follow. The annual survey by the Central American University José Simeón Cañas concluded that 92% of Salvadorans had not made any transactions in bitcoins by 2024.

The agreement signed with the International Monetary Fund sealed the retreat. In exchange for a 1.4 billion dollar extended credit facility over forty months, San Salvador agreed to rewrite its Bitcoin law. The Legislative Assembly voted for the reform on January 29, 2025, with 55 votes. Acceptance of bitcoin by businesses became optional again, the tax authority no longer collects BTC, and the state committed to reducing its operational role in Chivo Wallet. By early September 2026, the IMF approved the transfer of majority and operational control of Chivo to a private operator. However, the state retains a minority stake and custody of customer assets. The strategic reserve in bitcoin has not been called into question.

Meanwhile, the pivot to stablecoins has accelerated. The Comisión Nacional de Activos Digitales, a regulator created in 2023 to issue crypto licenses, has granted Tether a digital asset provider license following the announcement of its headquarters move to San Salvador. An investment banking law has allowed local institutions to handle digital assets on behalf of their clients. The passage of the GENIUS Act in the United States in July 2025 then provided a federal framework and verifiable reserve requirements for payment stablecoins.

The decisive ground remains that of remittances from the diaspora. The Banco Central de Reserva recorded 9.99 billion dollars in remittances in 2025, accounting for about a quarter of GDP, with over 92% coming from the United States. The IMF found that only 1.75% of this flow was passing through a crypto wallet, highlighting the low adoption.

It is within this void that Sivar is positioned, revealed by Bloomberg on September 29, 2026. The Bukele administration is partnering with Modveon, a start-up from Palo Alto, for a state application that verifies users through an official ID, categorizes them into communities based on their address, and then allows them to send and hold digital dollars. Payments go through Base, the Coinbase network. From the United States, the fee is $2, regardless of the amount. The recipient can withdraw funds at over 1,000 physical locations in El Salvador.

Bukele Has Not Sold a Single Satoshi from His Bitcoin Reserve

However, the Treasury has sold nothing. The Oficina Nacional del Bitcoin now shows nearly 7,800 bitcoins in reserve, with an average acquisition cost often around $55,000 each. Its director, Stacy Herbert, continues to defend the country’s bitcoin strategy. The public dashboard is still progressing at a rate close to one bitcoin per day. IMF reviews suggest otherwise: since mid-2025, this accumulation has come from private donations, without public resources, and no new budgetary acquisitions are planned.

The Salvadoran president admitted the failure in usage long before the reform of his law.

<< It has not achieved the widespread adoption we hoped for. >>
Nayib Bukele, President of El Salvador, in an interview with TIME

The division of labor has established itself elsewhere in Latin America. In Argentina and Venezuela, USDT serves as pocket dollars against inflation and currency controls, while bitcoin remains a long-term savings asset. El Salvador adds its own peculiarity, as its official currency is already the dollar, which replaced the colón in 2001, thereby depriving the central bank of any autonomous monetary policy. A dollar stablecoin digitizes a currency already in circulation, without affecting the unit of account.

Nana Murugesan, CEO of Modveon, summarizes it to Bloomberg: El Salvador continues to bet on bitcoin for the Treasury and as a store of value. To circulate money, Bukele wants the fastest, cheapest, and most reliable means, << and you can't beat stablecoins >>.

Thus, the two projects progress in parallel. On one side, a bitcoin reserve that the state has not sold. On the other, issuer licenses, an American framework behind it, and now a state application to facilitate the movement of digital dollars. The test is no longer ideological. It revolves around the $10 billion that the diaspora sends back each year.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.