El Salvador Revises Bitcoin Law

El Salvador's parliament has just approved an amendment to the Bitcoin Law, officially revoking Bitcoin's legal currency status after nearly two years of pressure from the International Monetary Fund (IMF). The IMF has stipulated that in order to receive the $1.4 billion loan the country is in dire need of, El Salvador's government must reduce Bitcoin-related risks by amending the law before the last day of this January.

After more than three years since the law was implemented, MPs amended six articles and repealed three out of a total of sixteen articles of the law. Under the new changes, Bitcoin will no longer be considered a “currency”, the acceptance of Bitcoin becomes voluntary instead of mandatory, and it can also not be used to pay taxes.

The ruling party has no choice but to make these changes. Despite being very active on social media, President Nayib Bukele has not yet made any comment on the event.

Earlier, in September 2021, El Salvador became the first country in the world to recognize Bitcoin as legal currency, despite 71 percent of the population objecting according to polls. The government has invested more than $200 million to build infrastructure, develop Chivo e-wallet and install Bitcoin ATMs across the country.

The law requires all businesses and public organizations to accept Bitcoin, unless they do not have the necessary technology to carry out the transaction. To encourage people to use it, the government has offered a $30 bonus for each person who installs a Chivo wallet on a phone.

However, a year after its rollout, only 21% of the population ever used the service, according to a survey by polling firm Ludop. By 2024, this figure continued to decline, with only 8.1% of people reporting that they still use Bitcoin.

The BBC notes that the new amendments to the Bitcoin Law have caused a lot of questions and controversy due to the unclear wording. The first clause after being amended removed the word “currency” but retained the word “legal,” leaving many people unable to understand exactly how Bitcoin is being defined under El Salvador's new law.

On February 1, 2025, El Salvador purchased two more Bitcoins, marking an increase in the country's BTC accumulation rate. Previously, the government used to buy one Bitcoin per day under long-term reserve plans, but recently, the number of purchases has been growing faster.

Currently, the total amount of Bitcoin held by El Salvador has reached 6,055 BTC, with a value of more than $612 million. In the past month alone, the country's government has added more than 50 BTC to its stockpile.

El Salvador's Bitcoin strategy has generated mixed reactions but has also attracted the interest of major companies in the industry. Fidelity Digital Assets' 2025 Look Ahead report indicates that El Salvador's approach could become the impetus for other countries to consider holding Bitcoin.

According to Fidelity experts, not owning Bitcoin could become a major risk for governments as the FOMO trend continues to spread globally.