El Salvador 'Officially' Adopts Stablecoin Payments... Abandoning Bitcoin (BTC)?

▲ El Salvador, Bitcoin (BTC), Gold/AI-generated image

Five years after El Salvador adopted Bitcoin (BTC) as legal tender, the country has officially introduced stablecoins as a payment method for international remittances. While Bitcoin remains a national reserve asset, analysis suggests El Salvador has shifted to a pragmatic approach by fully deploying fast and low-fee stablecoins for international remittances, which are directly related to the daily lives of most citizens.

On September 29 (local time), crypto media outlet BeInCrypto, citing Bloomberg, reported that the Salvadoran government decided to fully support Sivar, a stablecoin remittance application developed by Modveon, a Palo Alto-based US startup. Sivar operates on the infrastructure of US cryptocurrency exchange Coinbase Global (COIN) and the Layer 2 network Base. It has implemented a payment system that charges a fixed fee of $2 per transaction, regardless of the amount, when US residents send funds to El Salvador.

This policy change is a measure to improve the inefficiencies of the massive national international remittance market. According to the Central Bank of El Salvador, the country received approximately $10 billion in international remittances in 2025, with about 92% originating from the United States. However, the problem of tens of millions of dollars being lost annually due to high percentage-based fees from existing financial networks and payment service providers persisted. Users of the Sivar app can participate in address-based communities after identity verification and are also provided with a local election voting function for citizens residing abroad.

Modveon has drawn a line against market rumors of a Bitcoin policy abandonment. CEO Nana Murugesan stated, "El Salvador continues to firmly support Bitcoin as a national treasury reserve and a store of value." However, he explained, "President Nayib Bukele of El Salvador seeks the fastest, cheapest, and most reliable means in the remittance sector, and stablecoins are overwhelmingly dominant in this area."

The bailout agreement with the International Monetary Fund (IMF) is also cited as a factor influencing this practical division of roles. The Salvadoran government has maintained national reserves through private donations and internal financial adjustments instead of further purchasing Bitcoin with public funds. Furthermore, verification challenges regarding the actual cost-saving effects still remain, with studies from institutions like the Bank of Italy pointing out that stablecoin conversion costs can be up to 9%.

The Salvadoran government has moved away from sole reliance on Bitcoin and injected stablecoins into its payment infrastructure, establishing a two-track digital financial system. It remains to be seen whether this experiment, targeting an annual remittance market of $10 billion, will lead to real cost savings for the national economy ahead of the 2027 presidential election.

[Article Summary]

-The Salvadoran government has introduced the stablecoin app Sivar to reduce US remittance fees to $2 per transaction.

-Nana Murugesan stated that Bitcoin (BTC) will be maintained as a national treasury reserve asset, but stablecoins will lead real-life remittances.

-Attention is focused on the fee-saving effects in the $10 billion annual US international remittance market and their impact on the 2027 presidential election.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*