Crypto remittance share in El Salvador has reached new lows

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In December, the total amount of crypto remittances in El Salvador was $7.22M, which was below the 1% threshold.

Analyst JP Koning compiled data from the Banco Central de Reserva de El Salvador, which indicates that El Salvador’s cryptocurrency remittances have reached new lows, comprising less than 1% of the country’s total remittance inflows.

Bitcoin (BTC) was initially introduced as legal tender under President Nayib Bukele in 2021, and this represents a substantial decline from its zenith.

The total value of remittances sent through digital wallets that support cryptocurrencies was $7.22 million in December 2024.

Traditional money transmission methods dominate the country’s total remittance volume, which is only a fraction of this quantity.

Despite the government’s efforts to promote the widespread adoption of Bitcoin, the most recent data indicates a consistent decline in Bitcoin-based transfers.

In September 2021, El Salvador became the first country to recognize Bitcoin as legal tender, making history.

Expectations were high that BTC-based transfers would disrupt conventional channels and reduce costs for Salvadorans who received funds from abroad at the time.

Nevertheless, the data presents a different narrative. The central bank of El Salvador’s data indicates that cryptocurrency remittances reached their highest point in the months immediately following the implementation of the Bitcoin Law, but they have since experienced a consistent decline.

Conversely, Western Union and MoneyGram continued to dominate traditional channels, as total remittances to the country surpassed $7 billion in 2023.

El Salvador continues to be an appealing location for cryptocurrency companies, despite the decreasing prevalence of Bitcoin for remittances.

Tether, Bitfinex, and Bitget are among the cryptocurrency companies that have increased their presence in the country.

Executives from both organizations have made substantial real estate investments, which serve to underscore their dedication to the Salvadoran market.

In addition to their investments, Tether and Bitfinex have obtained critical regulatory licenses, such as approvals for securities trading and stablecoin issuance.

These actions are consistent with El Salvador’s overarching objectives to establish itself as a nation that is crypto-friendly.

Although the government has maintained its pro-crypto stance, recent policy changes suggest a willingness to reconcile its Bitcoin with international financial obligations.

El Salvador’s legal modifications are consistent with its agreement with the IMF, which grants it access to a $1.4 billion credit facility.

Also Read: MicroStrategy Launches $563.4 Million Stock Offering to Grow Bitcoin Holdings

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