Only 11% of El Salvador’s Registered Bitcoin Firms Are Operational

El Salvador’s Bitcoin Vision Faces Hurdles: Only 11% of Registered Firms Active

El Salvador’s ambitious Bitcoin experiment is encountering growing challenges. According to data from the Central Reserve Bank of El Salvador, only 20 out of 181 registered Bitcoin service providers are currently operational — just 11% of the total.

This revelation highlights the difficulty of meeting the country’s regulatory requirements under the Bitcoin Law, which mandates strict compliance on several fronts, including Anti-Money Laundering (AML) protocols, asset transparency, and cybersecurity standards.

Strict Regulations Limit Bitcoin Service Adoption

The country's Bitcoin Law, introduced in 2021 when El Salvador became the first nation to adopt Bitcoin as legal tender, lays out rigorous conditions for service providers. These include:

• Maintaining a robust Anti-Money Laundering (AML) program

• Keeping accurate records of assets, liabilities, and equity

• Implementing a cybersecurity program tailored to the nature of the services provided

At least 22 of the non-operational providers were flagged for failing to meet most of these legal obligations. In total, 89% of the firms did not satisfy one or more compliance requirements, rendering them inactive in the central bank’s database.

Still, a handful of firms have successfully met the criteria, such as the state-backed Chivo Wallet, along with companies like Crypto Trading & Investment and Fintech Américas.

Bitcoin Legal Tender Status Under Pressure

El Salvador’s move to adopt Bitcoin was a signature policy of President Nayib Bukele, designed to boost financial inclusion and attract crypto investment. However, the country's evolving relationship with the International Monetary Fund (IMF) may signal a shift in priorities.

As part of a recently signed $1.4 billion loan agreement with the IMF, El Salvador has pledged to scale back some of its Bitcoin initiatives. The agreement stipulates that:

• Taxes must be paid in US dollars

• Public institutions should limit Bitcoin usage

• The government should halt public sector Bitcoin purchases

Despite the agreement, President Bukele has insisted that Bitcoin acquisitions will continue, appearing to contradict the IMF’s conditions.

Legal Rollback on the Horizon?

Speculation is mounting over whether El Salvador will reverse its historic Bitcoin law. Activists and analysts have pointed to an upcoming change, suggesting a rollback law may take effect on April 30, potentially altering Bitcoin’s legal tender status.

John Dennehy, a Bitcoin educator based in El Salvador, discussed the proposed changes in a public online forum, indicating the government's intent to comply with parts of the IMF agreement while maintaining its Bitcoin holdings.

Conclusion

While El Salvador's Bitcoin experiment remains one of the most groundbreaking in global finance, the reality on the ground reveals significant friction between regulation, operational viability, and international obligations. As the April 30 deadline approaches, the world watches closely to see whether El Salvador will stay the course or pivot away from its bold Bitcoin-first approach.