El Salvador swaps bitcoin for stablecoins for everyday payments
September 29, 2026 · JICA LABS
Five years after becoming the first country to make bitcoin legal tender, El Salvador is turning to another kind of crypto for daily use: stablecoins, digital coins that always trade around one dollar. Bloomberg reported on September 29, 2026 that Nayib Bukele's government is developing an official app to hold and send digital dollars, including remittances.
What we know
- Who is building it: Modveon, a company based in Palo Alto, California.
- Where it runs: on Base, the Ethereum layer-2 network created by Coinbase.
- Which coin: it is not yet known whether it will use USDC, another existing stablecoin or a locally authorized one.
- Status: not launched. There are no joint official announcements or public contracts, so it should be treated as a project in development.
Why the shift
The numbers explain it. From January to July 2026, remittances received through crypto wallets totaled $41.11 million, versus $5.92 billion overall: about 0.7%. Remittances are key to the Salvadoran economy, and bitcoin was barely used to send them.
How we got here:
- September 7, 2021: the bitcoin law takes effect; businesses must accept it.
- January 29, 2025: after an agreement with the International Monetary Fund, the law is amended. Accepting bitcoin becomes voluntary and it can no longer be used for taxes. The state wallet, Chivo, is handed to a private operator.
- September 2026: the government looks to stablecoins for what bitcoin failed to deliver as a means of payment.
Bitcoin vs. stablecoin, simply put
Bitcoin's problem as everyday money is volatility: if you get paid today, that money could be worth 5% more or 5% less tomorrow. A stablecoin is pegged to the dollar, which has been El Salvador's official currency since 2001. For sending a remittance or paying for lunch, that is exactly what is needed. The trade-off is relying on the issuer to maintain its reserves (see what is a stablecoin).
Our take
It is the clearest admission that the experiment of bitcoin as mass payment money did not work. But it is not the end of crypto in El Salvador: it is a change of tool. If the app ships, it will be one of the first government-backed stablecoin wallets and a case to watch across Latin America, where USDT and USDC are already widely used to hedge inflation and send money.