Originally published 2021-06-29.
In late June 2021, El Salvador's government said that every adult who signed up for its new state-backed Bitcoin wallet would receive $30 in Bitcoin. The offer was part of President Nayib Bukele's plan to make Bitcoin legal tender alongside the US dollar, and it made the small Central American country the centre of a global experiment in national cryptocurrency use.
The short answer to what happened: the bonus was real, millions of people downloaded the wallet, but most stopped using Bitcoin once the free $30 was spent. In early 2025, under a loan agreement with the International Monetary Fund, El Salvador rolled back the key parts of its Bitcoin law. Here is how the offer worked, why the government made it, and what the results tell us.
How the $30 offer worked
The bonus was not paid into every citizen's pocket automatically. To claim it, an adult had to download the government's digital wallet, called Chivo (Salvadoran slang for "cool"), and register with a national identity document. Once verified, the account was credited with Bitcoin worth $30 at the time. Users could hold it, spend it at businesses that accepted Bitcoin, send it to others, or convert it to dollars and withdraw cash from Chivo machines installed around the country.
Chivo launched on 7 September 2021, the day the Bitcoin law came into force. It allowed users to keep balances in either Bitcoin or dollars, and the government promised no fees on transactions inside the app. Salaries and pensions continued to be paid in US dollars, and nobody was required to hold Bitcoin.
To put the amount in context, $30 was a meaningful sum in a country where many households live on modest incomes. It was clearly designed to get people to try the system rather than as a long-term payment.
Why El Salvador adopted Bitcoin
El Salvador's Legislative Assembly passed the Bitcoin Law on 9 June 2021, with 62 of 84 deputies in favour, after Bukele announced the idea in a video message to a Bitcoin conference in Miami. It made El Salvador the first country in the world to give Bitcoin the status of legal tender, meaning businesses were, in principle, required to accept it alongside the dollar.
The government's main argument was about remittances. By common estimates, around one in four Salvadorans lives abroad, most of them in the United States, and the money they send home was worth about 23% of the country's economic output in 2020. Bukele argued that Bitcoin could make these transfers cheaper and faster, and that it would bring financial services to the large share of adults who had no bank account.
Supporters also hoped that Bitcoin would attract investment, tech companies and tourists, and draw attention to a country better known abroad for gang violence than for innovation.
The dollar background
El Salvador gave up its own currency, the colón, in 2001, when it adopted the US dollar at a fixed rate of 8.75 colones per dollar. Dollarisation protected the country from runaway inflation and currency crises that hit several of its neighbours, but it also meant the government lost control of monetary policy: it cannot print money or set interest rates. Some supporters saw Bitcoin as a way to regain a degree of financial independence from the US Federal Reserve, while critics saw it as an unnecessary risk added to a system that was broadly stable.
Myths and facts about remittance fees
Early coverage of the offer often repeated claims that families lost up to 20% of every transfer to fees. That figure sits at the very top of the range rather than the norm. The World Bank, which tracks remittance prices worldwide, puts the global average cost of sending money at around 6% of the amount sent, and transfers from the United States to Central America have often been cheaper than that average.
Bitcoin transfers are also not automatically free. Moving coins on the main Bitcoin network costs a fee that varies with demand, converting between Bitcoin and dollars can carry a spread, and some services charged more than traditional providers. In practice, Bitcoin was used for only a tiny share of remittances to El Salvador: about 1.9% between September 2021 and April 2022, and around 1.3% in 2023, according to official figures cited in later reporting.
What happened after launch
The rollout was bumpy. On launch day, the app struggled with sign-ups and the price of Bitcoin dropped sharply. Protesters marched in San Salvador against the law, and there were reports of identity theft in which criminals used other people's ID numbers to claim the $30 bonus. The World Bank declined a request for help implementing the law, and in January 2022 the IMF urged El Salvador to drop Bitcoin's legal tender status.
A study published through the US National Bureau of Economic Research found that about 20% of people who downloaded Chivo never used their bonus, and that around 61% of users stopped using the app after spending it. Surveys by the Central American University's public opinion institute told a similar story: the share of Salvadorans who said they used Bitcoin for transactions fell from about a quarter in 2021 to around 8% in 2024.
The government also bought Bitcoin for the national treasury, announcing purchases on social media and building a reserve of several thousand coins over the following years. Ambitious projects such as a planned "Bitcoin City" powered by volcanic geothermal energy and a $1 billion "Volcano Bond" were announced but postponed.
The 2025 rollback
In early 2025, to secure a $1.4 billion loan programme from the IMF, El Salvador's legislature amended the Bitcoin law. Businesses were no longer required to accept Bitcoin, taxes and government fees could no longer be paid in it, and the state was released from its duty to support Bitcoin transactions, which opened the way to winding down its involvement in Chivo. Bitcoin can still be used voluntarily, and the government has continued to talk about its Bitcoin reserve, but the idea of Bitcoin as everyday money for all Salvadorans was effectively set aside.
What the experiment teaches
El Salvador's experience shows that a sign-up bonus can bring people to an app, but it cannot by itself change how they pay for groceries or send money home. Price swings, unfamiliar technology, and the fact that the dollar already worked well enough for daily life all kept usage low. Environmental critics also pointed to the large amount of electricity used by Bitcoin mining worldwide, which by some estimates at the time exceeded the annual consumption of entire mid-sized European countries.
For individuals, the general lesson applies anywhere: cryptocurrency prices can rise and fall quickly, so only put in what you can afford to lose, keep your account details private, and be careful with any offer that seems too generous.
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Sources: Wikipedia: Bitcoin in El Salvador; World Bank: Remittance Prices Worldwide. Original report on the $30 offer: Forbes.
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