El Salvador: Bitcoin and Freedom Visa

Concept

In September 2021, El Salvador became the first country to make bitcoin legal tender alongside the US dollar. President Nayib Bukele presented this as a way to attract capital, reduce the cost of migrant remittances, and put the country on the global technology map. Businesses were required to accept BTC, the state launched the Chivo wallet, and began purchasing bitcoin for reserves.

The launch on September 7, 2021, was accompanied by government support: everyone who installed the Chivo wallet received $30 in bitcoin from the state, and ATMs for exchanging BTC to cash were installed throughout the country. At the same time, "volcanic" bonds worth $1 billion and Bitcoin City near the Conchagua volcano with geothermal mining were announced. The IMF objected to the venture from the very beginning, warning of risks to financial stability and fiscal transparency—it was precisely its conditions that later determined the fate of the law.

Reversal Under IMF Pressure

The experiment collided with reality. The population used Chivo reluctantly, volatility scared off merchants, and international creditors viewed the venture with suspicion. In December 2024, in exchange for a $1.4 billion IMF loan, El Salvador agreed to roll back the mandatory nature of bitcoin. An amendment to the Bitcoin Law was adopted in early 2025: from May 2025, BTC ceased to be legal tender, acceptance by businesses became voluntary, taxes are no longer accepted in bitcoin, and the state's participation in Chivo is being wound down.

What Remains of the Experiment

Bitcoin in El Salvador remains fully legal for voluntary private transactions—it can be bought, held, and used by mutual consent. The state retained its accumulated bitcoin reserve and the specialized Bitcoin Office, and Bukele continued to position the country as a crypto-friendly jurisdiction. What changed was precisely the mandatory nature: from an obligation, bitcoin became an option.

The country's bitcoin reserve not only survived but continued to grow. By mid-2026, it approached 7,680 BTC compared to approximately 6,000 BTC at the time of the IMF deal; in dollar terms, this is about $0.49 billion—the coin count increased, while the market value dropped by summer 2026 following the price decline below $66,000. Authorities declare the purchase of approximately one bitcoin per day as part of a dollar-cost averaging (DCA) strategy launched in November 2022. However, in its July 2025 report the IMF recorded that the public sector's overall stock had not changed since February 2025, and attributed the visible increase to the consolidation of coins across government-owned wallets; as of mid-2026 the discrepancy between the two accounts is unresolved. The reserve is accounted for by the specialized Bitcoin Office.

Freedom Visa: Citizenship for Bitcoin

Parallel to the bitcoin law, in December 2023 the country announced an investment citizenship program known as Freedom Visa (officially—Adopting El Salvador), implemented jointly with Tether; in 2025, it was formalized by updated immigration and investment laws. The condition is a non-refundable contribution of $1,000,000 in bitcoin or USDT to the country's development fund; in return, the applicant receives citizenship and a passport. The program is limited to 1,000 participants per year.

The mechanics are straightforward: applications are submitted online, without a residency requirement, language exam, or personal interview. The initial non-refundable deposit is $999, which is credited toward the main contribution; the funds go to state development funds for culture, security, technology, and social projects. Applications can be made as a family, including spouse and children under 18. According to stated timelines, the path to a passport takes from six weeks—one of the fastest processes in the industry; in practice, verification of the source of funds for crypto contributions extends the process to a couple of months. Acceptance of contributions in USDT is technically provided by Tether.

The Salvadoran passport provides visa-free access to approximately 130 countries and territories—according to the Henley Index for 2026, this is around 33rd place. The list includes Schengen (90 days out of 180), the United Kingdom, Singapore, UAE, Russia, Japan, and almost all of Latin America; in April 2025, the US included El Salvador among the partners of the Global Entry program, which simplified entry for the country's citizens. By CBI industry standards, the price is high, and demand for the program remains niche. Where the passport actually provides mobility can be conveniently checked via the passport index.

Bitcoin as a Reserve Asset

The reserve has its own logic, separate from payment status. Since November 2022, El Salvador has declared purchases of approximately one bitcoin per day, holding the accumulated amount as a strategic asset and not selling during downturns. This is exactly where the dispute sits: the government and the Bitcoin Office publish daily buys, while the IMF holds that the public-sector stock has not grown since February 2025 and that the visible increase is wallet consolidation — under the lending programme the public sector is not to accumulate BTC voluntarily. The price drop in 2026 below $66,000 tested this line for strength: the coins remained on the balance sheet, and the loss remained on paper. Essentially, the country maintains a concentrated, unhedged position in a single asset; how this looks for private capital is discussed in the material on crypto for private wealth.

For the private holder, the Salvadoran experience is useful as a case study in managing crypto assets at the balance sheet level. Transparency of accounting remains a weak point: the IMF in its reports directly pointed to difficulties in verifying state reserves. The same questions—custody, documentary proof of ownership, correct tax accounting upon sale—arise for individuals as well. Tax consequences depend on the country of residence and are discussed by jurisdiction separately, and large settlements increasingly use stablecoins.

Freedom Visa Against Caribbean Programs

On the investment citizenship map, one million dollars is a significant sum. Classic Caribbean programs provide a passport for a non-refundable contribution of roughly $200,000–250,000: the floor is Dominica, whose fund route starts at $200,000 for a single applicant, and the ceiling is St. Kitts and Nevis at $250,000, with Antigua, Grenada and St. Lucia in between. Vanuatu is cheaper and faster, Turkey asks for about $400,000 in real estate. Against this backdrop, the Salvadoran price is high, and here you pay for speed, settlement in crypto, and the symbolism of the first bitcoin nation.

The practical side requires sobriety. A million-dollar contribution in crypto undergoes enhanced source-of-funds verification: banks and regulators treat passports obtained for crypto contributions with special attention, and documentary proof of the origin of assets is critical here. Citizenship itself does not make a person a tax resident of El Salvador: tax attachment is determined by actual residence and center of vital interests; the passport itself does not create it. In the logic of Plan B, a second passport remains primarily a mobility asset, and the tax picture is built separately.

Sober View for the Private Client

Freedom Visa requires a cold assessment. The contribution is non-refundable and significantly higher than Caribbean programs, and El Salvador's bitcoin course itself showed how quickly policy reverses under creditor pressure. Any passport obtained for a crypto contribution undergoes special scrutiny by banks and regulators when verifying the source of funds, so documentary proof of the origin of assets is critical here.

This material is an expert review and does not constitute individual legal or tax advice.