Chivo Wallet and Bitcoin in El Salvador: What Happened and Why It Changed

Chivo Wallet and Bitcoin in El Salvador: What Happened and Why It Changed

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El Salvador Case Study: The government gave $30 to every citizen. In early 2022, that same amount was worth less than a cup of coffee due to Bitcoin's drop from $69k to $16k.

On September 7, 2021, El Salvador became the first country in the world to make Bitcoin legal tender. Alongside that move came the Chivo wallet - a government-built app meant to let every Salvadoran send, receive, and spend Bitcoin with zero fees. At launch, the government gave every citizen who downloaded the app $30 in Bitcoin. Over 46% of the population installed it within weeks. But by January 2025, Bitcoin was no longer legal tender. What went wrong?

The Promise: Financial Inclusion Through Bitcoin

Before Chivo, about 70% of Salvadorans didn’t have bank accounts. Sending money from the U.S. to family back home cost up to 20% in fees through services like Western Union. That’s $1 billion a year lost to commissions. The idea behind Chivo was simple: use Bitcoin to cut those fees to zero. No middlemen. No delays. Just direct peer-to-peer transfers using a smartphone. The government claimed this would bring the unbanked into the financial system. And for a while, it looked like it might work. People could receive remittances instantly. They could pay for bus rides, groceries, or electricity using Bitcoin. The Chivo wallet supported both Bitcoin and U.S. dollars, so users didn’t have to convert unless they wanted to. It was designed to be easy - tap, send, done.

The Reality: Glitches, Losses, and Fear

But ease of use didn’t mean trust. Many users didn’t understand Bitcoin. They didn’t know how private keys worked. They didn’t realize the value of their $30 could drop 50% in a week. When Bitcoin’s price fell from $69,000 in late 2021 to under $16,000 in 2022, people saw their money vanish overnight. One user in San Miguel told reporters he used his $30 to buy a phone. Two weeks later, that same amount was worth less than a cup of coffee.

Technical problems made things worse. The app crashed constantly. Some users couldn’t log in. Others reported their accounts being hacked. Identity theft spiked. In one case, a grandmother lost her entire $30 after someone cloned her SIM card. The government promised help, but customer service was overwhelmed. There were no physical branches. No call centers that could speak local dialects. No clear instructions for people who’d never used a smartphone before.

The $30 Incentive Didn’t Stick

The $30 bonus was a brilliant marketing move. It got downloads. But it didn’t create users. By 2024, eight out of ten Salvadorans said they rarely or never used Bitcoin. Most kept the money in their Chivo wallet as a savings account - not a payment tool. They didn’t pay for anything with it. They didn’t send Bitcoin to friends. They just waited for the price to go back up.

Why? Because Bitcoin’s volatility made it risky for daily life. Imagine paying for your child’s school lunch with Bitcoin. The next day, the same amount buys half a sandwich. That’s not convenience - it’s instability. For families living paycheck to paycheck, that kind of uncertainty is dangerous.

A remittance worker watches their  Bitcoin fade on a cracked terminal as a thief clones their identity in orbit.

The IMF and the End of Legal Tender

By 2024, El Salvador’s economy was under strain. Inflation was rising. The government had borrowed heavily to buy more Bitcoin. The International Monetary Fund (IMF) stepped in with a $1.4 billion aid package - but with a condition: remove Bitcoin as legal tender.

In January 2025, that happened. Bitcoin is no longer required to be accepted by businesses. The government stopped forcing merchants to take it. The Chivo wallet still exists - but now it’s just an app, not a national mandate. The state has committed to winding down its public role in the wallet by July 2025. The $30 incentive is gone. The free transfers? Still there - but only for private users who choose to use them.

What’s Left? Bitcoin, But Not as Law

El Salvador didn’t give up on Bitcoin. It just stopped forcing it on people. The government still holds 6,102 Bitcoin - worth about $500 million - in its Strategic Bitcoin Reserve. In March 2025, it bought more. The country still hosts the PLANB Forum, Central America’s biggest crypto event. The Digital Assets Issuance Act of 2023 created the National Commission of Digital Assets (CNAD), which now regulates private crypto businesses - not the public.

So now, if you want to use Bitcoin in El Salvador, you can. But no one has to accept it. Banks still operate normally. Remittance companies still charge fees. Chivo is just one option among many.

A technician repairs a Chivo server amid glowing Bitcoin orbs, as ancient price holograms flicker like ghostly spirits.

Lessons from the Experiment

El Salvador’s Bitcoin experiment wasn’t a failure - it was a case study. It proved that technology alone can’t fix financial exclusion. You can’t force adoption. People need education, stability, and trust - not just an app and a cash bonus.

The Chivo wallet showed that:

  • Zero fees matter - but only if the asset doesn’t lose value daily.
  • Government backing doesn’t replace user understanding.
  • Volatility is a dealbreaker for everyday money.
  • Infrastructure matters - but so does support. No one wants to call a helpdesk that doesn’t speak their language.

Is Chivo Still Useful Today?

Yes - but only for those who understand it. Cross-border workers who get paid in Bitcoin from the U.S. still use Chivo to avoid Western Union fees. Crypto-savvy merchants accept Bitcoin because they can convert it to dollars instantly through the app. And for people who believe in Bitcoin long-term, it’s still a way to store value outside the traditional banking system.

But for the average Salvadoran? Most stick with dollars. They use mobile banking apps like Banred or digital wallets tied to their bank accounts. Chivo is now just another app in the lineup - not the only one.

What Comes Next?

El Salvador is no longer a global headline for forcing Bitcoin on its people. But it’s still a testing ground. Private companies are building new crypto tools - wallets, exchanges, payment processors - without government mandates. The CNAD is licensing them. The country is becoming a hub for crypto startups, not a forced experiment.

The real legacy of Chivo isn’t in the wallet itself. It’s in the proof that national-scale cryptocurrency adoption is possible - but only if it’s voluntary, stable, and supported by real education and infrastructure. El Salvador learned that the hard way. Other countries are watching.

Is Chivo wallet still active in El Salvador in 2025?

Yes, the Chivo wallet is still active, but it no longer has any special government backing or legal status. It functions as a regular Bitcoin and USD wallet for users who choose to use it. The government stopped requiring businesses to accept Bitcoin as payment in January 2025, and public sector involvement in the wallet will end by July 2025.

Why did El Salvador stop making Bitcoin legal tender?

El Salvador removed Bitcoin’s legal tender status in January 2025 after reaching a staff-level agreement with the International Monetary Fund (IMF). The IMF required the move as part of a $1.4 billion financial assistance package. The main concerns were Bitcoin’s price volatility, risks to financial stability, and the lack of widespread public adoption despite government efforts.

Did the Chivo wallet actually help people send remittances cheaper?

For those who used it correctly, yes. People receiving money from the U.S. saved money on fees - sometimes up to 15% compared to Western Union or MoneyGram. But many users didn’t understand how to convert Bitcoin to cash or were afraid of price swings. So while the tool worked technically, adoption for remittances was limited to a small, tech-savvy portion of the population.

What happened to the $30 the government gave everyone?

The $30 was deposited into users’ Chivo wallets as a one-time incentive. Most people either spent it quickly, held it hoping Bitcoin would rise, or lost it due to technical issues or scams. The government did not ask for it back, and it was never reissued after the initial launch. It served its purpose: driving downloads, not long-term usage.

Can you still buy Bitcoin with Chivo wallet today?

Yes. Users can still buy Bitcoin directly through the Chivo app using U.S. dollars. The app connects to licensed crypto exchanges and converts dollars to Bitcoin at market rates. However, since Bitcoin is no longer legal tender, the government no longer promotes or guarantees its use. It’s now just another feature - not a national policy.

Is El Salvador still a crypto-friendly country?

Yes, but differently. The government no longer forces Bitcoin on citizens, but it still supports private crypto businesses through the National Commission of Digital Assets (CNAD). El Salvador hosts major crypto events like PLANB Forum 2025 and continues to hold Bitcoin as a national reserve. The country is shifting from mandatory adoption to becoming a regional hub for crypto innovation - without the risks of forcing it on the public.

Author
  1. Joshua Farmer
    Joshua Farmer

    I'm a blockchain analyst and crypto educator who builds research-backed content for traders and newcomers. I publish deep dives on emerging coins, dissect exchange mechanics, and curate legitimate airdrop opportunities. Previously I led token economics at a fintech startup and now consult for Web3 projects. I turn complex on-chain data into clear, actionable insights.

    • 14 Aug, 2025
Comments (4)
  1. Nicole Parker
    Nicole Parker

    It’s wild to think about how much hope people pinned on Chivo. I remember reading about it in 2021 and thinking, ‘This could actually change everything for families sending money home.’ But then you realize-money isn’t just about tech. It’s about trust. And trust doesn’t get built by slapping a $30 bonus on an app nobody understands. People need to feel safe, not just ‘innovated.’ The volatility wasn’t just a bug-it was a feature that broke lives. One week your $30 buys a phone, the next it buys a soda. That’s not financial inclusion. That’s emotional whiplash.

    And the lack of real support? No one thought about the abuela in San Miguel who doesn’t speak English, can’t read a smartphone screen, and just wants to send her grandson a birthday gift without losing half her money to a glitch. The government built a Ferrari for people who still need a bicycle. The tech was there, but the humanity? Barely even on the roadmap.

    It’s not that Bitcoin is bad. It’s that forcing it on people who don’t want it, don’t understand it, and have zero safety nets? That’s not revolution. That’s colonialism with a QR code.

    • 14 August 2025
  2. Kenneth Ljungström
    Kenneth Ljungström

    Honestly? I’m kinda glad they backed off. 😅 The whole thing felt like a tech bro fantasy with a national budget. I get the dream-zero fees, borderless money, crypto freedom-but real life ain’t a demo video. People need stability. You can’t pay your kid’s school lunch in a currency that could halve in value by lunchtime. I’ve got friends who used Chivo and lost money. One guy bought a fridge with Bitcoin and it dropped 40% the next day. He cried. Not because he was poor-he was just trying to be smart.

    Now Chivo’s just a quiet app in the corner, like that one cousin who still believes in crypto but never talks about it at Thanksgiving. And honestly? That’s fine. Let it live as an option, not a mandate. The real win here is that El Salvador didn’t double down on a mistake. They adapted. That’s more mature than most countries.

    • 14 August 2025
  3. Brooke Schmalbach
    Brooke Schmalbach

    Let’s cut the romanticism. This wasn’t an experiment-it was a spectacle. The IMF didn’t ‘require’ Bitcoin’s removal because of volatility. They required it because the country was hemorrhaging capital on a failed speculative asset. The government bought Bitcoin at $69k and then sold chunks at $25k. That’s not investing. That’s gambling with taxpayer money. And the $30 giveaway? A cheap PR stunt to manufacture adoption metrics. No one who uses Chivo today does so because they believe in Bitcoin. They do it because it’s still the easiest way to receive remittances from the U.S.-not because they trust the currency, but because they’re too tired to fight Western Union’s 18% fees.

    The real failure? The government never bothered to educate. They didn’t fund community workshops. Didn’t translate instructions into Salvadoran Spanish dialects. Didn’t hire local support staff. They assumed tech would magically solve human problems. That’s not innovation. That’s arrogance dressed up as progress. And now the country’s stuck with 6,102 BTC they can’t spend and a reputation as the world’s most expensive crypto experiment.

    • 14 August 2025
  4. Cristal Consulting
    Cristal Consulting

    Chivo didn’t fail. It just wasn’t ready. People needed training, not a bonus. Simple.

    • 14 August 2025
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