El Salvador scrapped bitcoin's legal tender rule, but kept stacking sats

The part still standing is the pile. El Salvador's Bitcoin Office reported roughly 7,825 BTC in state hands in early November. The Chivo Wallet, once the flagship of the whole project, is now majority-owned by a private operator, a transfer the IMF flagged when it closed the second and third reviews of its programme on October 1, 2026.

It started loud. Parliament passed the bitcoin law in June 2021 with 62 of 84 votes, published on June 9, 2021, and it kicked in on September 7, 2021, the day bitcoin became legal tender alongside the US dollar and Chivo went live. Three rules made it a world first: every merchant and public authority had to take bitcoin, taxes could be paid in BTC, and the state promised automatic conversion into dollars so nobody carried price risk.

The tills never followed. A National Bureau of Economic Research survey of about 1,800 households in spring 2022 found 68 percent knew Chivo, but only around 20 percent of adults kept using it once the $30 sign-up bonus — roughly 3.75 days of minimum-wage pay — was spent, and fewer than 10 percent used it for bitcoin. About 20 percent of businesses accepted bitcoin, yet just 4.9 percent of sales were paid in it. FUSADES later found almost 98 percent of businesses polled had never logged a single bitcoin sale.

Then the IMF showed up with conditions. The December 2024 agreement produced an Extended Fund Facility approved on February 26, 2025: 40 months, about $1.4 billion, paid in tranches tied to reviews. The bitcoin asks were blunt — make acceptance voluntary, get the state out of Chivo, and stop buying bitcoin with public money.

Decree 199 delivered. Passed on January 29, 2025 by 55 votes to 2 after a debate of just over twelve minutes, against roughly five hours for the original law in 2021, it was published on January 30 and took effect 90 days later. Gone: the obligation to accept bitcoin, the option to pay taxes in BTC, and the two articles obliging the state to provide conversion alternatives that Chivo was built on. President Nayib Bukele said at the time that purchases would continue — which later became a sticking point with the IMF.

Even the label is contested. Some outlets reported the reform deleted the word currency but kept curso legal; heise online wrote that legal tender status was revoked. Economically it settles itself, since legal tender is defined by the duty to accept, and nobody in El Salvador has that duty any more. Germany offers the contrast: bitcoin was never legal tender there, and BaFin treats it as a crypto asset.