Is crypto legal in El Salvador? Rules & regulation (2026)

The IMF Board formally approved the Extended Fund Facility for El Salvador, disbursing ~$113 million immediately and unlocking a combined $3.5 billion financing package with multilateral partners. The arrangement binds El Salvador to Bitcoin policy rollback — voluntary private-sector acceptance, no public-sector BTC purchases, and Chivo wallet wind-down — as structural conditionality.

The Legislative Assembly passed Decree No. 199 on 29 January (55–2 vote) and it was published in El Salvador's Diario Oficial on 30 January 2025, effective 90 days later. The reform removes the mandatory-acceptance obligation: private merchants may voluntarily accept BTC, but no business is legally required to do so, ending El Salvador's experiment with compulsory Bitcoin legal tender.

After in-country discussions (5–14 December), IMF staff and El Salvador reached a staff-level agreement on a ~$1.4 billion, 40-month EFF. Crypto-specific conditions included making BTC acceptance voluntary, prohibiting public-sector Bitcoin transactions and mining, and winding down or selling the state Chivo wallet — marking the effective end of El Salvador's mandatory Bitcoin regime.

Amendments to the Digital Assets Issuance Law (LEAD) enacted 16 August 2024 designated CNAD as the sole institution empowered to regulate, supervise, and sanction the entire digital asset industry — tokens, stablecoins, Bitcoin service providers (BSPs), and DASPs — replacing previously fragmented authority across multiple agencies.

After nearly two years of delays, El Salvador's National Commission for Digital Assets approved the $1 billion tokenised sovereign 'Volcano Bond' for issuance, clearing it under the country's new digital securities framework. The bond was designed to fund Bitcoin infrastructure and Bitcoin City construction, though a large-scale public issuance never materialised.

El Salvador published Decree No. 643, creating a comprehensive legal framework for issuance, distribution, and trading of all digital assets beyond Bitcoin, including tokenised real-world assets and stablecoins. The law established the National Commission for Digital Assets (CNAD) as the dedicated licensing, registration, and supervisory authority — laying the foundation for a broader crypto-hub strategy.

The IMF's Article IV mission concluding statement for El Salvador formally recommended removing Bitcoin's legal-tender status, citing macroeconomic risks, financial stability concerns, and consumer-protection gaps. El Salvador's government publicly rejected the recommendation, setting up years of tension that ultimately forced the 2025 rollback.

President Nayib Bukele unveiled 'Bitcoin City' — a planned municipality at the base of Conchagua volcano, powered by geothermal energy — to be financed by a $1 billion tokenised bond: $500 million for BTC purchases, $500 million for infrastructure. The announcement signalled El Salvador's ambition to become a global crypto hub, though large-scale bond issuance never succeeded.

Legislative Decree No. 57 entered into force on 7 September 2021. Simultaneously, the government launched the state-operated Chivo wallet — the world's first national Bitcoin and dollar wallet — distributing $30 in BTC to every adult citizen to drive adoption. Initial server capacity was overwhelmed by demand, but long-term usage remained limited: by 2024, 92% of Salvadorans still did not use Bitcoin for transactions.

The Salvadoran Legislative Assembly approved Decreto No. 57 on 8 June 2021 with a supermajority (62 of 84 votes), published in the Diario Oficial on 9 June. The 16-article law granted Bitcoin unlimited legal-tender status alongside the US dollar — making El Salvador the first sovereign nation in history to do so — and mandated that all economic agents accept BTC.