El Salvador Legal Currency: The Country's Currency System—U.S. Dollar, Bitcoin, and the Colón

If you’re planning a trip or conducting business in El Salvador, understanding its monetary system is crucial. Key questions to know the answer to include: What currency is accepted? Can you use a credit card to make payments? Are ATMs available for cash withdrawals?

El Salvador Legal Currency system has drawn global attention in recent years—yes, I am referring to Bitcoin. But what exactly is El Salvador’s legal currency, and how does it impact residents and visitors?

The Official Currencies of El Salvador

The legal currencies of El Salvador are the U.S. dollar, the Salvadoran Colón, and Bitcoin. Although, many experts argue that Bitcoin is no longer a legal tender in the country.

The currency used in El Salvador the most is the U.S. dollar, with Bitcoin following it. Even though the Salvador Colón is legal tender, none are in circulation.

The U.S. Dollar: Primary Currency of El Salvador

Since 2001, the United States Dollar (USD) has been the official currency of El Salvador; it is the currency used daily by Salvadorans and businesses to do their transactions.

This country’s dollarization was the result of the “Monetary Integration Law,” which aimed to stabilize the economy, encourage foreign investment, and facilitate trade with the United States, the country’s largest trading partner.

The Monetary Integration Law allows the circulation of the U.S. dollar in El Salvador alongside the Salvadoran Colón. However, although it is a legal tender in the country, banks have removed the Colón from circulation.

As of the effective date of this law, the Central Reserve Bank of El Salvador, to the requirement of the banks of the system will exchange Colones in circulation for dollars. Article 4 of the Law of Monetary Integration.

Transitioning to the U.S. dollar has led to benefits such as lower interest rates, financial stability, and increased investor confidence.

Today, all official transactions in El Salvador, from paying taxes to shopping at local markets, are conducted using the U.S. dollar.

Bitcoin (BTC): Is It Still a Legal Tender?

In a historic move, El Salvador became the first country in the world to adopt Bitcoin as legal tender on September 7, 2021.

The Bitcoin Law, proposed by President Nayib Bukele and approved by the Legislative Assembly, required all businesses and government entities to accept Bitcoin as a form of payment alongside the U.S. dollar.

However, in January 2025, the Salvadoran Legislature changed the Bitcoin Law; government entities will no longer accept Bitcoin, and its use for private business will become optional.

These changes prompted many to argue that Bitcoin is no longer a legal tender in El Salvador.

You can still use it to pay for things in El Salvador; however, this option is only available in a few areas—mainly popular tourist destinations.

The Salvadoran Colón: El Salvador’s Original Bank Notes

The Salvadoran Colón is still considered El Salvador Legal Currency, meaning it can technically be used for transactions. However, since 2001, it has not been in circulation, replaced by the U.S. dollar.

Most Salvadorans exclusively use U.S. dollars, as the Colón is no longer available in banks or businesses. While legal, finding someone willing to accept Colón notes or coins is almost impossible.

Despite its status, the Colón holds historical and sentimental value. Some Salvadorans collect it as a symbol of national identity, though everyday transactions are entirely conducted in U.S. dollars.

El Salvador Legal Currency — Five Salvadoran Pesos.

Cash vs. Digital Payments: Can I use a credit card or Bitcoin to make payments?

While the U.S. dollar remains the dominant currency for everyday transactions, digital payments, such as Credit Cards and Bitcoin, are gaining popularity.

Credit and debit cards from major networks such as Visa and Mastercard are accepted in many establishments, though cash is often preferred for small transactions.

Credit and debit cards for payment are limited to formally established businesses and larger cities. Most businesses in small towns or small stores will only accept cash payments.

Bitcoin payment options vary. While large retailers, gas stations, and some restaurants accept Bitcoin, many small businesses still operate primarily with cash.

It might become more confusing now that businesses are no longer required to accept Bitcoin payments.

ATM Cash Withdrawals: Everything You Should Know

ATMs throughout the country dispense U.S. dollars, but options and fees will vary depending on whether you withdraw funds from a local bank or credit card, an international bank or credit card, or a Bitcoin wallet.

Withdrawing cash from a local bank or credit card. You can withdraw money from local bank ATMs, but using machines not affiliated with your bank typically incurs a fee. ATMs are widely available in most towns, making access to cash convenient.

Withdrawing cash from an international bank or credit card. This option is available, but keep in mind that not all ATMs allow withdrawals from international credit cards or bank accounts.

Additionally, the transaction withdrawal fees from both local and international banks are quite high.

For instance, Sensuntepeque, a small town in Cabañas, has six different ATMs from different banks; however, only one allows withdrawals from international banks or credit cards. This particular bank has a $250 withdrawal limit per transaction and charges $3.

Here is an example: A friend from the U.S. withdrew $1,000 at a local Salvadoran ATM from a U.S. bank in four different transactions—he got charged $3 per transaction. Later, he discovered that his U.S.-based bank had charged him an additional $12 per transaction. In total, he paid $15 per ATM withdrawal.

Be aware of the local ATM withdrawal fees and your bank’s charges when taking out cash, as it can become costly.

Withdrawing cash from a Bitcoin wallet. Withdrawing cash from a Bitcoin wallet is more difficult as Bitcoin ATMs are only available in the largest cities and popular surf destinations.

This may become even more difficult with the removal of Chivo ATMs. El Salvador is required to sell its Chivo ATMs due to an agreement with the International Monetary Fund (IMF).