El Salvador Turns to Stablecoins for Remittances as Bitcoin Use Fades

El Salvador's government is supporting a new app that enables citizens to send and store digital dollars. The application operates on stablecoins rather than Bitcoin (BTC).

President Nayib Bukele made El Salvador the first nation to adopt Bitcoin as legal tender five years ago. The country now appears to be pivoting toward a more stable cryptocurrency.

I’ve just sent the #BitcoinLaw to Congress 🇸🇻 pic.twitter.com/DljnxsXlyt

— Nayib Bukele (@nayibbukele) June 9, 2021

How the El Salvador Stablecoin App Works

The application, named Sivar, was developed by Modveon, a Palo Alto-based startup that exited stealth mode on Tuesday, according to Bloomberg. Payments are processed on Base, a blockchain network created by US exchange Coinbase.

Salvadorans sent $9B home last year. Percentage fees took millions of it.@Modveon's Sivar now uses Coinbase infrastructure and Base to let US users send any amount to El Salvador for a flat $2.

Transfer to off-ramp, all included. pic.twitter.com/a5b2na5lJ0

— Coinbase 🛡️ (@coinbase) September 29, 2026

Users start by verifying their identity with a government-issued ID. The app subsequently groups them locally according to their home address.

After that, they can transfer funds, publish posts, and participate in live polls. Salvadorans residing overseas are also able to vote in local elections through the app.

Modveon CEO Nana Murugesan stated that El Salvador represents the company's first country-wide rollout. The five-year agreement includes a multimillion-dollar fee, the value of which was not revealed.

That post has subsequently been removed.

Reasons Bitcoin Payments Did Not Gain Traction

Bitcoin never achieved widespread use as daily currency in El Salvador. In 2024, roughly 92% of Salvadorans reported not using it, according to a University of Central America survey.

The International Monetary Fund (IMF) discovered that only about 1.75% of remittances were transferred via crypto wallets. Remittances refer to funds sent by relatives working overseas to their home country.

In 2025, reforms linked to a $1.4 billion IMF loan eliminated Bitcoin's mandatory acceptance requirement. They also reduced the scope of Chivo, the government's Bitcoin wallet.

#Cripto en El Salvador | El 92 % de los salvadoreños no utiliza el bitcóin para transacciones, según encuesta. https://t.co/WvJCsDUznx

— El Economista (@Eleconomistanet) October 11, 2024

Is Bukele Abandoning Bitcoin?

Not when it comes to the national treasury, Murugesan told Bloomberg.

“El Salvador keeps embracing Bitcoin when it comes to treasury and as a store of value. But from a money movement point of view, President Bukele is very committed to the fastest, cheapest and most trusted way of moving money, and you can’t beat stablecoins,” Bloomberg reported, citing Nana Murugesan, the CEO of Modveon.

Earlier this month, the IMF stated that donations, rather than public funds, were behind El Salvador's recent increase in Bitcoin reserves.

The financial scale for the new app is substantial. El Salvador received almost $10 billion in remittances in 2025, according to central bank data. Approximately 92% of those funds originated from the United States.

Sivar imposes a flat $2 fee per transfer for US users sending money home. But cheaper crypto corridors are not assured. A Bank of Italy study found that stablecoin remittances are not less expensive than bank transfers, with costs as high as 9%.

Bitcoin's role in the nation could also be tested by voters shortly. Bukele's opponents are already questioning his Bitcoin approach ahead of the 2027 election.