El Salvador’s Legislative Assembly approved the Bitcoin Law (Legislative Decree No. 57), setting the country on a fast timeline to recognize bitcoin as legal tender alongside the U.S. dollar. The law’s text included a requirement that "every economic agent" accept bitcoin for payments, with an exception for those lacking the needed technology.
Soon after the law passed, the World Bank said it would not help El Salvador implement bitcoin as legal tender. The Bank cited concerns including transparency and environmental issues, signaling early skepticism from major international institutions.
President Nayib Bukele publicly set September 7, 2021 as the launch date for the government-backed "Chivo" wallet, designed to let users pay in bitcoin or dollars and convert between them. The government also promoted a physical support network, including hundreds of planned ATMs and service points, to reduce friction for users.
As the law went live, Bukele announced that El Salvador had bought bitcoin for the national balance sheet, beginning a series of state purchases. This moved the experiment beyond payments infrastructure into direct government exposure to bitcoin price swings.
The Bitcoin Law entered into force, making El Salvador the first country to implement bitcoin as legal tender. The launch day was marked by technical issues for some users, and public protests in San Salvador against the policy and its rapid rollout.
Within the first week, officials reported rapid Chivo wallet sign-ups and highlighted expansion of the supporting ATM network inside El Salvador and in U.S. cities. The ATM buildout was presented as a way to make cash-in/cash-out and remittances easier, especially for Salvadorans abroad sending money home.
Bukele announced a proposed "Bitcoin City" near the Conchagua volcano and plans to raise about $1 billion through a bitcoin-linked bond often called a "Volcano Bond." The plan tied the bitcoin policy to a broader national development narrative and sought new financing options outside traditional markets.
The International Monetary Fund publicly urged El Salvador to remove bitcoin’s legal-tender status, highlighting risks to financial stability, financial integrity, and consumer protection. This intensified a central tension in the experiment: national policy goals versus lender and investor concerns.
After bitcoin’s price fell sharply in 2022, Bukele announced the government would buy one bitcoin each day starting November 17, framing it as a long-term accumulation strategy. The plan made the country’s bitcoin policy look more like a standing investment program rather than a one-time launch initiative.
El Salvador passed legislation creating a framework for issuing digital asset–linked instruments popularly known as "Volcano Bonds." The move aimed to operationalize the earlier bond proposal by establishing rules for issuance and oversight, even as actual issuance faced delays and market uncertainty.
El Salvador announced it had paid an $800 million bond that matured in January 2023, easing short-term default fears that had been part of the wider discussion around its finances and bitcoin strategy. The payment did not end concerns, but it changed the immediate narrative from "default risk" to longer-term sustainability questions.
By the end of 2023, the core pieces of the national experiment were in place: legal-tender status, the Chivo wallet and ATM network, and ongoing government bitcoin accumulation. At the same time, international institutions continued to warn about risks, and reports indicated everyday use remained limited compared with the initial policy ambitions.
El Salvador's Bitcoin law, Chivo wallet rollout, and national experiments (2021–2023)