14-6-2025 – El Salvador’ is grappling with a dramatic 44.5% plunge in crypto remittances during the first quarter of 2025, compared to the same period in 2024. This sharp decline, driven by Bitcoin’s turbulent price swings and faltering public confidence, has sparked mounting concerns over the economic stability of a country where remittances form a vital lifeline for countless families. Official figures reveal that crypto inflows, once a beacon of hope for financial innovation, dwindled to just $16 million in 2025, a stark contrast to the $57 million peak recorded through the Chivo Wallet in the final quarter of 2021.
El Salvador’s pioneering adoption of Bitcoin as legal tender in 2021 was heralded as a transformative step to harness the $7 billion Central American remittance market, aiming to bypass the steep fees of traditional services like Western Union and channel more funds directly to households. Yet, the promise of widespread crypto adoption has faltered. In 2024, crypto remittances totalled $28.83 million, averaging $7 million per quarter across roughly 27,000 transactions. By 2025, these transfers accounted for a mere 0.52% of the nation’s $3 billion in total remittance inflows, underscoring a retreat from earlier highs.
The root of this downturn lies in Bitcoin’s volatility, with prices oscillating between $93,907 and $108,949 from January to May 2025, sowing uncertainty among Salvadorans wary of financial risk. Compounding the issue are persistent regulatory hurdles and wavering market sentiment, which have stymied the broader embrace of crypto for remittance purposes. The consequences of this decline loom large, threatening to undermine GDP growth, strain foreign exchange reserves, and disrupt the balance of payments in an economy heavily reliant on these funds.
Despite the setbacks, glimmers of hope persist. Projections suggest digital remittances, including non-crypto transfers, could climb to $148.39 million in 2025, surpassing last year’s figures and hinting at resilience in alternative digital channels. For now, however, El Salvador’s crypto experiment stands at a critical juncture, its ambitions tempered by the harsh realities of market dynamics and the challenge of sustaining trust in a volatile financial frontier.
