New monetary bet in San Salvador. El Salvador is turning to dollar-backed stablecoins to circulate money through its economy, five years after making Bitcoin legal tender. Since the adoption of Bitcoin, the government of Nayib Bukele has not sold any of the bitcoins accumulated by the state.
The country has been dollarized since 2001 and received nearly $10 billion 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 start-up Modveon, which circulates digital dollars on the Coinbase Base network.
Key Points
Mandatory legal tender for bitcoin jumped in January 2025, condition set by the IMF for a $1.4 billion loan
Tether established its headquarters in San Salvador after obtaining a digital asset provider license from the local regulator
The Salvadoran state maintains its BTC reserve, now close to 7,800 units, and the public dashboard continues to rise despite requests from the IMF
Remittances from the diaspora, nearly $10 billion in 2025, are the target of the stablecoin shift
Sivar, revealed by Bloomberg, promises a flat rate of 2 dollars to send any amount from the United States
El Salvador puts away its bitcoin experiment and bets on stablecoins
It all started on September 7, 2021, when El Salvador became the first state in the world to make bitcoin a legal tender. To boost adoption, every citizen who downloaded the Chivo public wallet received $30 in BTC. For their part, merchants were required to accept payment in bitcoins and the State promised fee-free transfers for expatriate workers. However, the enthusiasm did not follow. The Central American University José Simeón Cañas’ annual survey concluded that 92% of Salvadorans had not made any bitcoin transactions in 2024.
The agreement signed with the International Monetary Fund sealed the decline. In exchange for an expanded credit facility of $1.4 billion over forty months, San Salvador agreed to rewrite its Bitcoin law. The Legislative Assembly voted for the reform on January 29, 2025 by 55 votes. Acceptance of bitcoin by businesses has become optional again, the tax authorities no longer collect BTC, and the State has committed to reducing its operational role in Chivo Wallet. At the beginning of September 2026, the IMF recorded the transfer of the majority and operational control of Chivo to a private operator. The State nevertheless retains a minority stake and custody of client assets. The strategic reserve in bitcoin has not been called into question.
At the same time, the pivot towards stablecoins has accelerated. The Comisión Nacional de Activos Digitales, a regulator created in 2023 to issue crypto approvals, granted Tether a digital asset provider license after announcing the move of its headquarters to San Salvador. A law on investment banking has since authorized local establishments to manipulate digital assets on behalf of their clients. The vote on the GENIUS Act in the United States in July 2025 then provided payment stablecoins with a federal framework and verifiable reserve requirements.
The decisive area remains that of shipments from the diaspora. Banco Central de Reserva has recorded $9.99 billion in remesas in 2025, or about a quarter of GDP, with more than 92% coming from the United States. The IMF found only 1.75% of this flow passed through a crypto wallet, highlighting the low adoption.
It is into this void that Sivar, revealed by Bloomberg on September 29, 2026, fits. The Bukele administration is partnering with Modveon, a Palo Alto start-up, for a state application that verifies users using an official ID, categorizes them into communities based on their address, then allows them to send and hold digital dollars. Payments go through Base, Coinbase's network. From the United States, the flat rate is 2 dollars, regardless of the amount. The recipient can collect the funds at over 1,000 physical locations in El Salvador.
Bukele did not sell a single satoshi from his bitcoin reserve
However, the Treasury has not sold anything. The Oficina Nacional del Bitcoin now displays nearly 7,800 bitcoins in reserve, for an average acquisition cost often located around $55,000 per unit. Its director, Stacy Herbert, continues to defend the country's bitcoin strategy. The public dashboard is still growing at a rate close to one bitcoin per day. The IMF reviews say something else: since mid-2025, this accumulation would come from private donations, without public resources, and no new budgetary acquisitions are planned.
The Salvadoran president had admitted the failure on the usage side well before the reform of his law.
“It didn’t see the widespread adoption that we were hoping for. »
Nayib Bukele, President of El Salvador, in an interview with TIME
The division of labor has taken hold elsewhere in Latin America. In Argentina as in Venezuela, USDT acts as a pocket dollar in the face of inflation and exchange controls, while bitcoin remains a long-term savings asset. El Salvador adds its own particularity, since 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 this way to Bloomberg: El Salvador continues to rely on bitcoin for the Treasury and as a store of value. To circulate money, Bukele wants the fastest, cheapest and most reliable way, “and you can’t beat stablecoins”.
The two projects are therefore progressing in parallel. On one side, a bitcoin reserve that the State has not sold. On the other, transmitter licenses, an American framework at the back, and now a state application to make the digital dollar travel. The test is no longer ideological. It depends on the 10 billion dollars that the diaspora sends back each year.
