El Salvador’s cryptocurrency remittance hit new lows, making up less than 1% of the country’s total remittance inflows, as per data from the Banco Central de Reserva de El Salvador compiled by analyst JP Koning.
This marks a significant decline from their peak in 2021 when Bitcoin (BTC ($101,336.73)) was first introduced as legal tender under President Nayib Bukele.
In December 2024, the total value of remittances sent through digital wallets supporting cryptocurrencies stood at $7.22 million.
This amount is a fraction of the country’s total remittance volume, which is largely dominated by traditional money transfer methods.
Source: JP KoningThe latest figures highlight a persistent downtrend in Bitcoin-based transfers, despite the government’s push for wider BTC adoption.
Declining Adoption Despite Government Support
El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender.
At the time, expectations were high that BTC-based remittances would disrupt traditional channels and reduce costs for Salvadorans receiving funds from abroad.
However, the numbers tell a different story. Data from El Salvador’s central bank shows that cryptocurrency remittances peaked in the months following the Bitcoin Law’s implementation but have since declined steadily.
In contrast, total remittances to the country exceeded $7 billion in 2023, with traditional channels such as Western Union and MoneyGram maintaining dominance.
Despite the waning adoption of Bitcoin for remittances, El Salvador remains an attractive hub for cryptocurrency companies.
Crypto companies such as Tether, Bitget and Bitfinex have expanded their presence in the country.
Executives from both companies have made significant real estate investments, reinforcing their long-term commitment to the Salvadoran market.
In addition to their investments, Tether and Bitfinex have secured key regulatory licenses, including approvals for stablecoin issuance and securities trading.
These moves align with El Salvador’s broader efforts to position itself as a crypto-friendly nation.
IMF Influence and El Salvador Policy Adjustments
While the government has continued its pro-crypto stance, recent policy shifts indicate a willingness to balance its Bitcoin with international financial obligations.
El Salvador’s legal changes align with its agreement with the IMF, allowing access to a $1.4 billion credit facility.
The funds will cover essential payments and support Bukele’s economic plans. The IMF has raised concerns about Bitcoin’s impact on financial stability.
Despite Bukele minimizing the reforms, the rollback reflects a shift from the government’s earlier pro-crypto approach.
Notably, the government has stopped accepting Bitcoin for tax payments. This decision marks a departure from its initial approach of full-scale BTC integration into the economy.
The government removed its obligation to support Bitcoin transaction infrastructure. Previously, the state-backed Chivo wallet was a key part of El Salvador’s crypto system.
The adjustment reflects the growing need to align with traditional financial institutions while maintaining El Salvador’s reputation as a crypto-friendly jurisdiction.
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