President Nayib Bukele of El Salvador reviews a model of Bitcoin City. El Salvador was the first nation in the world to adopt Bitcoin as legal tender in 2021. This bold move sparked global debate, with Bitcoin proponents heralding it as a revolution in global finance, while critics question the implications for financial stability and the country’s economy.
Nevertheless, El Salvador’s adoption of Bitcoin, through the introduction of Bitcoin Law, has catalyzed a series of initiatives aimed at fostering innovation, financial inclusion, and economic growth.
The journey began with El Zonte, also known as Bitcoin Beach, a grassroots initiative in a coastal town, and quickly gained momentum with significant national investments in Bitcoin and blockchain infrastructure.
By 2025, Bitcoin has become deeply woven into the fabric of El Salvador’s financial ecosystem, from governmental support via the Bitcoin Office to everyday transactions. Today it is possible to pay for your lunch, buy a property, and shop at the local mall using Bitcoin in El Salvador.
The Introduction of Bitcoin Law
On June 9, 2021, El Salvador’s Legislative Assembly passed a landmark bill that officially recognized Bitcoin as legal tender. The law, known as the Bitcoin Law, was introduced by President Nayib Bukele’s government with the aim of improving financial inclusion and reducing remittance costs for the country’s population.
A central tenet of the Bitcoin Law was that Bitcoin would be accepted as a medium of exchange alongside the US dollar, the country’s official currency since 2001.
The law mandated that all businesses in El Salvador must accept Bitcoin for goods and services, though it also allowed individuals to choose whether or not they wished to use the cryptocurrency.
The government even launched its own Bitcoin wallet called Chivo, which allowed Salvadorans to send, receive, and hold Bitcoin easily. To encourage adoption, the government gave away $30 worth of Bitcoin to each citizen who downloaded and registered with Chivo.
Though the Bitcoin Law initially faced opposition and skepticism from various sectors, both within the country and internationally, the government’s efforts have led to a slow but steady adoption of Bitcoin by businesses and individuals alike.
The Bitcoin Beach Initiative
The adoption of Bitcoin in El Salvador didn’t start with the government’s Bitcoin Law, however. The journey to nationwide Bitcoin adoption began in the small coastal town of El Zonte, where a grassroots initiative known as Bitcoin Beach was born.
Bitcoin Beach was founded by a group of Bitcoiners and philanthropic organizations with the mission of fostering economic empowerment through the use of Bitcoin.
El Zonte became the first community in the world where Bitcoin was used extensively as a means of exchange. Through a combination of donations, local merchants, and individuals, Bitcoin Beach laid the groundwork for what would later become a nationwide Bitcoin experiment.
The initiative quickly spread to other towns and cities, and when the government passed the Bitcoin Law in 2021, Bitcoin Beach had already demonstrated the viability of Bitcoin as a daily-use currency.
The success of Bitcoin Beach provided the blueprint for the country’s broader Bitcoin adoption strategy. By showing that a small community could benefit from the economic opportunities Bitcoin could provide, it proved that Bitcoin was more than just an investment or speculative asset—it could be used as a real currency to facilitate transactions, create jobs, and boost local economies.
Bitcoiners Are Embracing El Salvador
As Bitcoin’s role in El Salvador has grown, so too has the influx of Bitcoiners—enthusiasts, developers, and investors—who have been drawn to the country for its Bitcoin-friendly policies and innovative spirit. Many Bitcoiners are relocating to El Salvador to take advantage of the country’s favorable regulatory environment and the growing Bitcoin ecosystem.
Several prominent Bitcoin conferences, such as the Adopting Bitcoin Conference and the Plan B Conference, are now held annually in El Salvador, drawing thousands of Bitcoin enthusiasts, developers, investors, and entrepreneurs from around the world.
These conferences have become key events in the global Bitcoin calendar, showcasing the country’s role as a Bitcoin hub and fostering collaboration within the cryptocurrency community.
Beyond the networking and educational opportunities, the influx of international visitors has significantly contributed to the growth of El Salvador’s tourism industry, boosting local businesses, hotels, and restaurants.
The presence of these conferences further cements El Salvador’s position as a destination for Bitcoin innovation and a model for cryptocurrency adoption.
El Salvador real estate marketplace Vivo Latam, co-founded by Michael McCluskey, is one of the companies that has seen a significant increase in interest from Bitcoiners. McCluskey stated, “We work a lot with the Bitcoin community.
Many Bitcoiners are interested in buying properties in El Salvador with Bitcoin. Also, several Bitcoiners are now investing in El Salvador by buying rental properties, building businesses, and developing financial solutions for Salvadorans and the broader world.”
El Salvador is quickly becoming a hotbed for Bitcoin-related investments. Bitcoiners are buying property, establishing startups, and creating innovative financial services that cater to both locals and expatriates.
The influx of Bitcoin-related businesses and investments has not only brought fresh capital into the country but also provided new opportunities for employment, education, and financial inclusion. The capital that Bitcoiners bring to El Salvador’s economy helps to develop infrastructure, boost tourism, and support local businesses.
Bitcoiners are able to buy property in El Salvador using Bitcoin. Platforms such as Vivo Latam help facilitate Bitcoin property transactions through regulated financial services providers. All property transactions must undergo KYC/KYB, AML, and due diligence checks similar to traditional property transactions.
The Rise in Merchant Adoption
One of the most notable effects of Bitcoin’s legalization in El Salvador has been the surge in merchant adoption. As of early 2025, thousands of businesses, from small street vendors to large retail chains, accept Bitcoin as a form of payment. According to government statistics, the number of merchants accepting Bitcoin has continued to rise steadily since the Bitcoin Law was enacted.
The government’s Chivo wallet has played a pivotal role in this process by offering a simple, user-friendly app that allows businesses to receive Bitcoin payments with ease.
In addition to the Chivo wallet, there are various other custodial and non-custodial wallets available for both businesses and individuals to use, such as Blink (formerly known as Bitcoin Beach Wallet).
While the Chivo wallet is the most widely used option among Salvadorans, many businesses and individuals prefer non-custodial wallets due to concerns over privacy and control. These wallets give users the freedom to transact directly with their Bitcoin without relying on a central authority like the government.
Non-custodial wallets also provide enhanced security features, such as private keys, and are compatible with Bitcoin’s Lightning Network, which is increasingly becoming the payment method of choice for smaller transactions.
El Salvador’s Bitcoin Reserve
Another noteworthy development in El Salvador’s Bitcoin journey is the country’s strategic reserve. As of March 2025, the country’s Bitcoin reserve stands at more than 6,000 Bitcoin, which is worth hundreds of millions of dollars.
The government plan includes the purchase of one Bitcoin per day for the national reserve, similar to how other governments traditionally stockpile foreign bonds and gold bullion.
El Salvador’s Bitcoin reserve is a significant step towards ensuring that the country benefits from Bitcoin’s long-term growth potential. While Bitcoin’s price can be volatile in the short term, the country’s long-term strategy is to accumulate and hold Bitcoin as a store of value and potential wealth generator.
This reserve is also intended to act as a financial buffer that can be used to stabilize the country’s economy in times of crisis or to support economic development projects in the future.
The Digital Asset Law: A New Era of Blockchain Innovation
In addition to the Bitcoin Law, El Salvador made another critical move in 2023 by implementing a Digital Asset Law. This new law aimed to create a clear and comprehensive regulatory framework for digital assets beyond Bitcoin.
The Digital Asset Law provides clarity on the legal status of various cryptocurrencies and blockchain technologies, establishing a regulatory framework for their use in the country.
The Digital Asset Law enables the creation of a legal framework for tokenization using digital assets and the issuance of stablecoins. The law created the National Commission on Digital Assets (“CNAD”), which is the regulatory body of digital assets.
This law aims to provide a safe and predictable environment for businesses and individuals to engage in blockchain and cryptocurrency activities, further solidifying El Salvador’s position as a leader in the digital asset space.
The law also facilitates the issuance of digital securities, paving the way for the development of new financial products and services. By creating a supportive legal framework, the Digital Asset Law encourages both local and international businesses to consider El Salvador as a hub for blockchain and cryptocurrency innovation.
The Lightning Network: Making Bitcoin Affordable
One of the primary reasons for Bitcoin’s increasing adoption in El Salvador is the Lightning Network. The Lightning Network is a second-layer scaling solution built on top of the Bitcoin blockchain that allows for faster, cheaper, and more scalable transactions.
It has become the preferred method for many users and businesses in El Salvador due to its low transaction fees, which are essential for everyday transactions.
The Lightning Network’s ability to facilitate microtransactions makes it ideal for small payments, such as buying coffee or groceries, where traditional Bitcoin transactions would incur high fees and slow processing times. With the Lightning Network, users can send Bitcoin instantly with near-zero fees, making it an ideal payment solution for merchants and consumers alike.
Conclusion
Bitcoin adoption in El Salvador has been nothing short of revolutionary. From the introduction of the Bitcoin Law to the growth of Bitcoin Beach, the influx of Bitcoiners, and the creation of a strategic Bitcoin reserve, the country has positioned itself as a global leader in cryptocurrency adoption.
With thousands of merchants accepting Bitcoin, a comprehensive Digital Asset Law, and the widespread use of the Lightning Network, El Salvador has created an ecosystem where Bitcoin is not just an asset but a tool for financial empowerment and economic development.
The Bitcoin experiment in El Salvador has not only changed the way Salvadorans interact with money, but it has also brought new opportunities and challenges for the country’s future.
