This jurisdiction has evolving or restrictive regulations that require careful compliance. Additional licensing, reporting, or operational constraints may apply.
El Salvador Cryptocurrency Regulatory Overview
El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender. However, in February 2025, the country reversed this decision under pressure from the International Monetary Fund. Bitcoin is no longer legal tender, though El Salvador continues to hold Bitcoin reserves. The experiment with Bitcoin legal tender did not achieve the hoped-for financial inclusion goals. The country still maintains some crypto-friendly policies but has stepped back from its pioneering position. The regulatory environment is in transition following the reversal of Bitcoin legal tender status.
El Salvador Blockchain Compliance Requirements
Legal Tender Status: Reversed in February 2025 (was legal tender 2021-2025). Current Status: Bitcoin legal but not mandatory legal tender. Reserves: Government maintains Bitcoin holdings. IMF Influence: Policy reversal driven by IMF requirements. Financial Inclusion: Bitcoin adoption did not meet expectations. Regulation: Transitioning framework post-legal tender reversal. Taxation: Evolving tax treatment. Innovation: Still exploring crypto opportunities. Risk Level: Moderate; policy uncertainty. Future Direction: Unclear post-reversal.
Crypto Licensing Requirements in El Salvador
Crypto businesses, including exchanges and service providers, must obtain a Digital Asset Service Provider (DASP) license from the National Commission of Digital Assets (CNAD). The CNAD also oversees the registration of issuers and marketers of digital assets under the LEAD.
Cryptocurrency Tax Treatment in El Salvador
0% capital gains tax on profits derived from Bitcoin and other digital assets for both residents and foreign investors. Other income is subject to standard income tax.
Official Sources & Regulatory References
AML/CFT requirements may be stringent or evolving. Enhanced due diligence may be required.
Enforcement actions may be unpredictable or strict. Monitor regulatory developments closely.
Disclaimer: This information is provided for general guidance only and should not be considered legal advice. Regulations change frequently. Always consult with qualified legal professionals in the relevant jurisdiction before making business decisions.