Written by: Ashrith Rao

Translated by: Chopper, Foresight News

El Salvador's Bitcoin cross-border remittances continue to grow but only account for 0.7% of the total remittance flow. There is a significant gap between the grand policy vision and the actual choices of the people.

El Salvador has had Bitcoin as legal tender for five years. The central bank of the country released remittance data for the first half of 2026, revealing a harsh reality: the total amount of remittances through crypto channels was only $35.4 million, accounting for just 0.7% of the $5.06 billion in total cross-border remittances.

Compared to the $25.4 million data from the same period last year, this represents a growth of 39.1%. In fact, the total amount of crypto remittances in the first half of this year has already exceeded any previous year's first half.

However, for El Salvador, a 0.7% share is negligible. The remittance scale approaches 24% of the country's GDP, consistently higher than the combined total of exports, foreign direct investment, and tourism revenue.

The impressive year-on-year growth rate hides more truths. Crypto remittances plummeted from $85.5 million in 2024 to $57.67 million in 2025, a drop of 32.5%, which can be considered a heavy blow.

The recovery in the first half of 2026 is indeed real, but it is based on a very low base, making it difficult to become the turning point that crypto supporters hope for. Since the legislation took effect in 2021, the path to Bitcoin adoption has been fluctuating, with progress being intermittent, resulting in an overall annual growth rate of just above 1%.

84% Reality

Those unchanging elements form the cornerstone of the story. More than 84% of remittances sent to El Salvador are still conducted through banks and traditional remittance companies.

The proportion of cash remittances brought back by travelers has risen to 3.8%, which is already five times the size of the crypto channels.

The issue does not arise from technological defects, but from people's behavioral habits. Salvadorans living abroad (especially in the United States) clearly prefer familiar and trusted ways of sending money.

Bank transfers, Western Union, and MoneyGram may not be the fastest or the lowest in fees, but they excel in stability and reliability, remaining the public's first choice.

Five years ago, the government claimed that digital currencies could help Salvadorans save $400 million in remittance fees each year, but today this goal has seen almost no substantial progress. The initial estimate that $400 million could be saved was obviously overly optimistic.

The monthly data at the beginning of 2026 shows a concerning trend. The first half of the year saw a significant increase in crypto remittances, with a year-on-year growth rate of 146.4%. The first quarter saw an increase of up to 49.7%, while growth dropped to 44.4% in April, and the growth momentum gradually slowed; in May, the growth rate stabilized at 41.7%. The decline in growth is merely a normal phenomenon caused by the base effect, as the same period last year saw only a 1% growth rate. Data indicates that this round of increase is more of a phase uplift rather than a sustained acceleration in growth.

The growth is not due to a large influx of new users. The average value of single transfers from crypto wallets rose from $269.7 in 2025 to $310.9 in 2026, an increase of $41 per single transfer. This means that funds are becoming more concentrated: a minority is increasing the transfer scale, which does not represent a widespread acceptance of cryptocurrency by the general public.

IMF's Invisible Hand

In February 2025, El Salvador secured a $1.4 billion medium-term loan from the International Monetary Fund (IMF), accompanied by two stringent clauses: first, the government must not actively increase its Bitcoin holdings; second, it is prohibited to issue any public debt or tokenized financial instruments denominated in Bitcoin.

The Salvadoran government subsequently revised the Bitcoin Law: private merchants can choose whether or not to accept Bitcoin voluntarily, and all taxes must be paid in US dollars.

As part of the agreement with the IMF, the government-led Chivo wallet is gradually being shut down. This wallet was originally the core pillar of Bukele's (the current president of El Salvador) Bitcoin strategy.

This is a significant change with far-reaching implications. Chivo was originally the core infrastructure to promote Bitcoin for daily consumption. The official gradual shutdown of the wallet essentially acknowledges the failure of the strategy to promote Bitcoin adoption relying on government power.

The IMF’s language is relatively mild, describing the initiative as a “wallet business integration” rather than a complete withdrawal, allowing both sides to retain room for negotiation.

Current policies are full of contradictions. On one hand, they limit the daily circulation of Bitcoin, while on the other, the government continues to increase its Bitcoin reserves. The government's line of thinking has shifted; it no longer promotes Bitcoin as a circulating currency but rather views it as a reserve asset. Remittance data proves that if the public truly used Bitcoin as everyday currency, the market landscape would be drastically different.

Stablecoin Suspense

The statistics hide doubts; the driving force for growth may not be Bitcoin, but stablecoins.

With their stable value and efficient transfer characteristics, stablecoins are replacing fiat currencies in developing countries, becoming a popular choice for cross-border fund transfers.

A Salvadoran resident settled in Los Angeles can completely bypass Bitcoin and directly transfer USDC to family in San Salvador through crypto infrastructure.

If a growing share of the $35.4 million funds belongs to stablecoins, then the overall effectiveness of Bitcoin projects will be even more concerning than the surface data suggests. What truly drives growth is the USD token that circulates in the crypto network, not Bitcoin itself. Although there is no precise data breakdown, this trend is evident throughout Latin America.

Bitso has already achieved a stablecoin payment volume in the billions, becoming a leading crypto exchange in Latin America. Even if asset performance does not meet expectations, the underlying blockchain technology continues to penetrate.

Global Headwinds and Local Resistance

Global regulatory pressure continues to rise. Anti-money laundering and anti-terror financing rules are tightening, and the EU's crypto assets regulatory framework (MiCA) is about to be fully implemented. Although the inflow of crypto funds into El Salvador is not large, as global regulatory standards unify, the flow of related funds will inevitably come under strict monitoring.

El Salvador has shown "initial signs of adaptation" in its anti-money laundering and anti-terror financing framework, but compliance adjustments do not equal crypto adoption.

Meanwhile, the country's overall remittance market continues to expand, with total remittance volume increasing from $4.84 billion in the first half of 2025 to $5.06 billion in the first half of 2026, an increase of 4.5%.

The overall market is steadily growing, but the share of crypto channels remains below 1%. Even if the year-on-year growth rate of 39% is sustained, it remains a long way from breaking a 2% market share for crypto remittances. This prediction is still based on a highly unlikely assumption: that traditional remittance channels will not continue to iterate and upgrade.

The Truth Behind the Data

$35.4 million should not be simply equated with policy failure. The figures demonstrate that there are indeed Salvadorans using digital assets to complete cross-border transactions, and real funds are flowing. But compared to the original grand policy vision, there is a significant gap in this report.

Although the Bitcoin law has been in effect for five years, the gap between political rhetoric and reality has never been this wide.

The government continues to talk about strategic reserves and frequently purchases Bitcoin; ordinary people still prefer to use traditional channels like Western Union. The IMF urges the country to control crypto risks, while the U.S. Treasury wishes to increase Bitcoin assets.

The central bank of El Salvador shows a penetration rate of only 0.7%, while the Chivo wallet is simultaneously nearing its end.

This article's focus is not on the difficulties Bitcoin faces in El Salvador. The core story lies in the government's complete shift in goals. Originally planned to use cryptocurrency to benefit the general public, it has now turned into viewing Bitcoin as a national financial strategy.

For five years, remittance data has consistently released the same signal. Indeed, a 39.1% year-on-year growth rate is striking, but the 0.7% market share is equally thought-provoking. In terms of national fiscal accounts, the significance of these two numbers cannot be compared.