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El Salvador launches Sivar stablecoin app five years after Bitcoin law

El Salvador launches Sivar stablecoin app five years after Bitcoin law

New Capabilities

Dollar stablecoins replace Bitcoin for US-to-El Salvador transfers, even as the Bitcoin Office denies official backing

Today: El Salvador and Modveon launch Sivar

Overview

Updated 40 minutes ago

Five years after El Salvador became the first country to make Bitcoin legal tender, its newest payments app runs on dollar-backed stablecoins instead. On September 29, El Salvador and Palo Alto startup Modveon launched Sivar, a national app that sends money from the US for a flat $2 fee, settling transfers on Coinbase's Base network.

Sivar targets a $9 billion remittance corridor, with about 92% of flows coming from the US. Bitcoin never cracked it — the IMF found just 1.75% of remittances moved through crypto wallets. A wrinkle emerged immediately: El Salvador's Bitcoin Office denied the government backs Sivar, saying state involvement ended when Chivo Wallet was sold to private operators.

Why it matters

If Sivar works, it cuts remittance costs for 1.6 million Salvadorans — and signals stablecoins' edge over Bitcoin for cross-border payments.

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Key Indicators

$9B
2025 remittances to El Salvador
About 92% of the flows originate in the US, and 1.6 million Salvadorans depend on them.
$2
Flat transfer fee per Sivar transaction
The fee is fixed regardless of amount, though separate charges apply for funding and cash withdrawal.
25,000+
Salvadorans pre-registered before launch
Registrations came during a pre-launch rollout refined with community input.
1.75%
Share of remittances via crypto wallets, per IMF
Bitcoin adoption stayed flat at this level since the legal tender law took effect.
1,000+
Cash-out locations across El Salvador
Recipients convert stablecoin balances to cash at local outlets.

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People Involved

Organizations Involved

Timeline

September 2021 September 2026

8 events Latest: Today
Tap a bar to jump to that date
  1. Bitcoin Office denies government backing for Sivar

    Upcoming Statement

    El Salvador's Bitcoin Office says the government is not backing or operating Sivar, contradicting the launch announcement.

  2. El Salvador and Modveon launch Sivar

    Today Launch

    Sivar launches with $2 flat-fee stablecoin transfers on Base, verified identity communities and more than 25,000 pre-registered users.

  3. MoneyGram expands stablecoin transfers to El Salvador

    Competition

    MoneyGram launches a USDC-based service in El Salvador via the Stellar network, letting customers hold dollar balances and withdraw cash.

  4. Modveon raises $10 million seed round

    Funding

    Seed round backed by Coinbase Ventures, Firebolt Ventures, Humla Ventures and Strategic Cyber Ventures.

  5. Chivo Wallet sold to private operator

    Institutional

    The state transfers majority ownership and operations of the Chivo Wallet to a private operator.

  6. Modveon founded

    Company

    Palo Alto startup Modveon is founded to build identity-first digital infrastructure for governments.

Scenarios

1

Sivar becomes the standard for US-El Salvador remittances

Possible Resolves by End of 2027

Discussed by: Coinbase and Modveon, which frame the app as a bid to move the corridor's remittance flows on-chain

If Sivar's flat $2 fee and cash-out network drive adoption past the levels Bitcoin reached, stablecoin transfers could take a meaningful share of the $9 billion corridor. Modveon says it won't expand beyond El Salvador until the model works here, making domestic adoption the test. Early signs would be rising verified-user counts and transfer volumes reported by the company or Coinbase.

2

Sivar mirrors Chivo wallet's decline

Possible Resolves by Q2 2027

Discussed by: Observers noting Bitcoin's stagnant adoption in the same market; IMF data on crypto remittances

The IMF found Bitcoin wallets handled just 1.75% of remittances five years after adoption. If Sivar follows the same path, stablecoins remain a niche within the corridor and traditional remittance services keep their share. MoneyGram's Stellar-based USDC service, launched in April, is the comparable test of whether stablecoins fare better than Bitcoin did.

3

Government backing dispute escalates

Uncertain Resolves by End of 2026

Discussed by: TokenPost and observers flagging the contradiction between the launch announcement and the Bitcoin Office denial

The Sivar launch was announced as a government partnership, but the Bitcoin Office said the government isn't backing the app and state involvement ended with Chivo Wallet's sale. If AAB's contract with Modveon comes under official scrutiny, the partnership could be confirmed, modified or terminated. A formal statement from either side would resolve the contradiction.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

March 2007 onward

M-Pesa, Kenya (2007)

Safaricom launched M-Pesa, a mobile money service that let Kenyans transfer value via SMS through a network of agents, without needing bank accounts.

Then

M-Pesa reached tens of millions of users within years and became Kenya's dominant payments rail.

Now

It became the global model for mobile money in emerging markets, showing mass adoption requires simplicity and a dense cash-out network.

Why this matters now

The benchmark Sivar is trying to reach: a payments app adopted by ordinary people, not just crypto enthusiasts.

September 2021

El Salvador's Bitcoin legal tender law (2021)

President Nayib Bukele made El Salvador the first country to adopt Bitcoin as legal tender, promising cheaper remittances and financial inclusion. The state launched Chivo Wallet with free Bitcoin bonuses for new users.

Then

Technical problems and volatile prices hampered early adoption; usage stayed low.

Now

The IMF found only about 1.75% of remittances moved through crypto wallets five years later, and a 2025 IMF deal forced legal changes rolling back Bitcoin's mandatory status.

Why this matters now

Same country, same remittance goal, different technology — Sivar uses dollar stablecoins precisely because Bitcoin failed to move the needle.

September 2021 to 2025

Chivo Wallet (2021-2025)

The government's state-backed Bitcoin wallet was the centerpiece of El Salvador's crypto experiment, distributing free Bitcoin to encourage adoption.

Then

Adoption stalled and the wallet drew criticism over technical failures and costs.

Now

The state transferred majority ownership and operations to a private operator in 2025, ending direct government involvement in digital wallets.

Why this matters now

Sets the precedent of government-run crypto wallets failing in El Salvador — and the baseline for what Sivar must beat.

Sources

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