El Salvador, which recognized Bitcoin as legal tender in 2021, faced challenges in realizing its ambitious crypto vision by 2025. Despite requiring all merchants to accept Bitcoin and launching the Chivo Wallet with monetary incentives, widespread use by the public remained limited. Many Salvadorans took the initial Bitcoin bonus but did not continue using the app, and everyday use of Bitcoin as payment remained rare. El Salvador’s Bitcoin policy came under pressure due to economic struggles and debt, prompting it to seek a $1.4 billion IMF loan. The IMF opposed Bitcoin as legal tender, citing financial stability risks, and conditioned the loan on the weakening of El Salvador’s Bitcoin Law. In early 2025, the government made Bitcoin acceptance voluntary and reaffirmed taxes would be in U.S. dollars. While President Bukele’s administration continued to purchase Bitcoin, seemingly via entities technically outside IMF restrictions, broad public adoption did not materialize. Crypto businesses, however, remained interested in El Salvador due to its favorable regulatory environment. As of December 2025, the government’s Bitcoin holdings are substantial and in profit, but most benefits accrue to the state, not ordinary citizens. Future adoption depends on further education and public engagement.

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