Is Crypto Legal In El Salvador?

Cryptocurrency is legal in El Salvador, though Bitcoin is no longer recognized as legal tender following amendments passed by the Legislative Assembly in January 2025. The country initially became the first nation to adopt Bitcoin as legal tender in September 2021 through the Bitcoin Law, requiring all economic actors to accept it as payment and guaranteeing automatic convertibility to US dollars (1). However, as a condition for securing a $1.4 billion loan from the International Monetary Fund, El Salvador removed the mandatory acceptance requirement effective May 1, 2025 (2).

The regulatory framework for cryptocurrencies remains structured through the Digital Assets Issuance Act and regulations issued by the Financial System Regulatory Body. El Salvador established the Register of Virtual Asset Service Providers in accordance with FATF Recommendation 15, creating supervisory mechanisms for AML/CFT compliance (1). Financial institutions and virtual asset service providers must implement transaction traceability systems, maintain suspicious transaction reporting obligations, and adhere to record-keeping requirements as mandated by Financial System Superintendency regulations (1).

"As of 7 September 2021, El Salvador became the first country in the world to recognise Bitcoin as legal tender. The regulation of the use of Bitcoin is developed in different regulatory bodies."

Despite the policy reversal, El Salvador continues maintaining Bitcoin reserves totaling 6,244 BTC valued at approximately $742 million, representing a 127 percent profit based on acquisition prices. The government-operated Chivo wallet will be privatized and transferred to private sector management to reduce pressure on public finances (2). Bitcoin acceptance by businesses and private merchants is now voluntary, taxes must be collected exclusively in US dollars, and public sector involvement in Bitcoin-related activities has been confined per IMF requirements (2).

Source:
https://rm.coe.int/btc-regulation-elsalvador-ana-samayoa-eng/1680a49664
https://dig.watch/updates/bitcoin-is-no-longer-legal-tender-in-el-salvador

Last updated: 18-10-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.