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El Salvador: Selected Issues

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  • International Monetary Fund

Abstract

This Selected Issues paper focuses on Bitcoin and financial inclusion in El Salvador. El Salvador’s economy can benefit from policies to facilitate access to financial services, enhance financial literacy and lower the cost of remittances. However, the Bitcoin adoption as legal tender has not contributed to promote financial inclusion and digital remittances. More than one year after implementation, the adoption of Bitcoin as official currency with legal tender status has thus far not led to visible improvements in financial inclusion. Despite the large use of public funds for subsidizing bitcoin transaction costs, acceptance and use by individuals and firms remains minimal. The project involves sizeable risks, including fiscal contingencies, consumer protection and governance issues, which could be magnified in the event of wider adoption and further fallout in crypto markets. Importantly, there is no evidence of any beneficial use case of Bitcoin for the unbanked population.

Suggested Citation

  • International Monetary Fund, 2025. "El Salvador: Selected Issues," IMF Staff Country Reports 2025/068, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2025/068
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    Keywords

    copyright page; No. 25/68; legal tender status; valuation profits; dollar-Bitcoin conversion; Financial inclusion; Currencies; Digital financial services; Central America; Global; Sub-Saharan Africa;
    All these keywords.

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