Crypto regulation in El Salvador
From the first country to make bitcoin legal tender to a voluntary-acceptance regime under an IMF loan program.
El Salvador made bitcoin legal tender on September 7, 2021, requiring businesses to accept it. On January 29, 2025, as part of a $1.4 billion IMF loan program, lawmakers voted 55–2 to amend the law: accepting bitcoin is now voluntary, taxes must be paid in US dollars, and the state no longer has to support bitcoin payments. Bitcoin remains recognized in law, and the government kept its bitcoin holdings.
Last reviewed: November 2026. Facts on this page were checked against official sources on November 4, 2026.
El Salvador at a glance
| Owning crypto | Legal. |
|---|---|
| Buying and selling | Through registered bitcoin and digital asset service providers. |
| Paying with crypto | Accepting bitcoin is voluntary since 2025; the US dollar is the main currency. |
| Exchange licensing | Central bank registry for bitcoin service providers; CNAD for digital asset issuers and service providers. |
| Mining | Legal; the state has mined bitcoin with geothermal power. |
| Tax | Taxes payable in US dollars only since the 2025 reform. |
| Stablecoins | Digital Assets Issuance Law (2023) allows licensed issuance; Tether moved its headquarters there in 2025. |
| Restrictions and bans | The IMF program limits further public-sector bitcoin accumulation. |
Owning crypto
Owning bitcoin is legal, and El Salvador remains one of the most crypto-friendly legal systems in the world.
Buying and selling
Bitcoin service providers register with the central bank (BCR), and digital asset service providers are supervised by the National Commission of Digital Assets (CNAD), created by the Digital Assets Issuance Law in January 2023.
Paying with crypto
The 2021 Bitcoin Law made bitcoin legal tender and required every business able to do so to accept it. The January 2025 amendments, passed 55–2 to meet an IMF condition, made acceptance by the private sector voluntary and removed the state's obligation to facilitate bitcoin transactions. Taxes and government fees must be paid in dollars. Whether bitcoin should still be called "legal tender" is debated: the law still recognizes it, but no one has to take it. Surveys before the change already showed few Salvadorans used bitcoin day to day.
Exchange licensing
The CNAD licenses issuers of digital assets (including tokenized bonds and stablecoins) and digital asset service providers. The BCR maintains the registry for bitcoin service providers.
Mining
Mining is legal. A state-linked operation has mined bitcoin using geothermal energy from volcanoes.
Tax
Since the 2025 reform, taxes are paid in dollars. The 2021 law exempted bitcoin exchanges from capital gains tax; because the 2025 reform rewrote parts of the law, check the current position with the Ministry of Finance before relying on it.
Stablecoins
The 2023 Digital Assets Issuance Law allows licensed issuance of stablecoins and other tokens. Tether, issuer of USDT, announced in January 2025 that it was moving its headquarters to El Salvador after obtaining a licence there.
Restrictions and bans
Under the IMF Extended Fund Facility, the government agreed to limit public-sector bitcoin activity. In its September 2026 review statement, the IMF said El Salvador had used no public funds to accumulate bitcoin since June 2025, that later additions came from private donations, and that the government had handed majority control of the state-run Chivo wallet to a private operator.
What changed recently
The Bitcoin Law passes; it takes effect September 7, 2021, with the Chivo wallet.
Digital Assets Issuance Law creates the CNAD.
IMF staff agree a $1.4 billion loan program with bitcoin conditions.
Congress amends the Bitcoin Law 55–2: acceptance becomes voluntary.
IMF reaches staff-level agreement on its combined second and third reviews.
- The government's bitcoin holdings and purchases are disputed: officials have announced purchases, while the IMF says no public money has been used since June 2025. Treat any holdings figure as the government's claim.
- The tax treatment of bitcoin gains after the 2025 reform should be confirmed with the Ministry of Finance.
This page summarizes the rules for general understanding. Laws change, and how they apply depends on your circumstances. For a decision that matters, check the official sources below or ask a qualified local adviser.
Frequently asked questions
Is bitcoin still legal tender in El Salvador?
Bitcoin is still recognized in law, but since January 2025 nobody is required to accept it and taxes must be paid in dollars. Many describe it as voluntary legal tender.
Why did El Salvador change its bitcoin law?
To secure a $1.4 billion loan program from the International Monetary Fund, which required making bitcoin acceptance voluntary and limiting the public sector's bitcoin exposure.
Where to next
Sources
- El Salvador and the IMF (International Monetary Fund country page)
- El Salvador passes bill to revise bitcoin adoption strategy per IMF deal (The Block, January 2025)
- El Salvador has not used public funds to accumulate bitcoin since June 2025, IMF says (The Block, September 2026)
- Comisión Nacional de Activos Digitales (CNAD)
Written for beginners and checked against the sources listed. Last reviewed November 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.