El Salvador and Bitcoin – 4 years on
El Salvador is a small Central American country on the Pacific, bordered by Guatemala and Honduras, whose official currency has been the U.S. dollar since 2001. In June 2021, under President Nayib Bukele’s push, the Legislative Assembly passed the Bitcoin Law, making Bitcoin legal tender alongside the US dollar.
The government rolled out a state‑backed wallet (Chivo), gave citizens $30 in Bitcoin to encourage use, and required (initially) that merchants accept it.
They also announced ambitious infrastructure plans: “Volcano Bonds” to fund a Bitcoin city powered by geothermal energy from volcanoes, and mining using volcanic geothermal power.
How did it go?
- El Zonte & Bitcoin Beach: Even before the national law, the coastal village of El Zonte pioneered a circular economy experiment known as Bitcoin Beach.
- Max & Stacy move in: Bitcoin advocates Max Keiser and Stacy Herbert relocated to El Salvador and became deeply involved.
- Volcano mining: Using geothermal energy from the Tecapa volcano creating the concept of 'volcano‑powered Bitcoin.'
- Bitcoin reserves & bonds: El Salvador has accumulated more than 6,000 BTC in its strategic reserve and announced plans for Volcano Bonds.
What’s happening now?
The story hasn’t been without setbacks.
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In early 2025, as part of a $1.4 billion IMF deal, El Salvador agreed to scale back some Bitcoin policies. The requirement for merchants to accept Bitcoin was lifted, and paying taxes in bitcoin was dropped.
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Citizen adoption has cooled. By 2024, only about 8% of Salvadorans reported using Bitcoin in daily transactions, down from over 20% in earlier years.
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Projects like Bitcoin City and Volcano Bonds have faced delays, while the Chivo wallet may be wound down or sold.
But not everything is retreat.
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El Salvador has launched the CUBO+ education program, designed to produce elite-level Bitcoin and Lightning developers through the Salvadoran university system. Certificates are issued on-chain for easy verification.
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The country’s unrealised gains on its purchased bitcoin are estimated at around $400 million USD, on an initial investment of about $301 million USD.
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El Salvador has also reportedly mined up to $46 million USD worth of bitcoin from its geothermal-powered mining operations.
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El Zonte has become a globally iconic bitcoin circular economy - something we looked to for inspiration for our own Bitcoin Basin project!
What’s next?
El Salvador’s Bitcoin experiment is evolving rather than ending. Watch for:
- Whether Volcano Bonds finally launch and raise international capital.
- Expansion of geothermal and renewable-powered mining through projects like Volcano Energy.
- Growth of Bitcoin education programs and developer training led by the National Bitcoin Office.
- More grassroots adoption through circular economies like Bitcoin Beach.
- Further accumulation of a sovereign reserve of bitcoin through purchases and mining profits.
The bigger picture
El Salvador didn’t solve every problem with a single law, but it did prove something important: a sovereign nation can experiment with Bitcoin at scale. Four years on, the lesson may not be that Bitcoin instantly transforms a nation, but that building a Bitcoin economy is a marathon, not a sprint.
Start your own El Salvador style Treasury at Lightning Pay!