Emre Yumlu 
Despite being the first country to adopt Bitcoin as legal tender, El Salvador is facing significant setbacks in its crypto industry. Out of the 181 companies registered as Bitcoin service providers with the country’s central bank, only 20 are currently operational, representing a mere 11% of the total.
This data, reported by local outlet El Mundo using figures from the Central Reserve Bank of El Salvador, indicates that most registered providers have failed to meet regulatory requirements under the nation’s Bitcoin Law.
Strict Bitcoin Law Leaves Firms Inactive
El Salvador’s regulatory framework for Bitcoin companies includes Anti-Money Laundering (AML) compliance, accurate financial reporting, and a customized cybersecurity program suited to each company’s operations. At least 22 non-operational firms have reportedly failed to comply with the majority of these conditions.
In total, 89% of companies on the official registry have not fulfilled the necessary legal obligations to remain active.
Some Companies Still Compliant with National Standards
Despite the setbacks, a handful of firms, such as the government-supported Chivo Wallet, Crypto Trading & Investment, and Fintech Américas, have managed to meet the compliance criteria and maintain their active status.
Bitcoin’s Role in El Salvador’s Economic Plan Faces Uncertainty
El Salvador adopted Bitcoin as legal tender in 2021, positioning it alongside the US dollar as part of President Nayib Bukele’s bold economic vision. However, recent developments suggest a shift in policy.
The country secured a $1.4 billion loan agreement with the International Monetary Fund (IMF), which includes a provision to scale back Bitcoin initiatives. According to the agreement, taxes must now be paid in US dollars, and public institutions are to limit their use of Bitcoin.
Although the IMF has called on El Salvador to halt public sector Bitcoin acquisitions, President Bukele has asserted that the government will continue to accumulate Bitcoin, casting doubt on the IMF deal’s implications.
Further fueling speculation, a new law altering Bitcoin’s legal tender status is reportedly set to take effect on April 30, raising questions about the future of Bitcoin within El Salvador’s public and private sectors.
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.