El Salvador's Bitcoin Implementation Faces Challenges as Few Registered Providers Meet Regulations

According to data from the Central Reserve Bank of El Salvador, only 20 out of 181 registered Bitcoin service providers are currently operational in the country. This represents just 11% of registered firms, with the remaining 89% classified as non-operational for failing to meet requirements established under El Salvador's Bitcoin Law.

Local media outlet El Mundo reported these findings based on the central bank's database. At least 22 non-operational providers have failed to satisfy most of the country's Bitcoin Law requirements, which mandate stringent supervision of financial systems.

The Bitcoin Law requires service providers to maintain an Anti-Money Laundering program, keep accurate records of company assets, liabilities and equity, and implement a cybersecurity program tailored to their specific services. The vast majority of registered providers have not fulfilled these obligations.

Among the few firms that have met the legal criteria are the state-backed Chivo Wallet, Crypto Trading Investment, and Fintech Américas. These companies have successfully complied with all regulatory requirements to achieve operational status.

El Salvador made history in 2021 by becoming the first country to accept Bitcoin as legal tender alongside the US dollar. President Nayib Bukele incorporated Bitcoin as a key component of the country's economic strategy.

Recently, El Salvador signed a $1.4 billion loan agreement with the International Monetary Fund (IMF), which requires scaling back some Bitcoin-related initiatives. Under this deal, taxes must be paid in US dollars and public institutions must limit their Bitcoin usage. On March 3, the IMF requested that the country stop public sector Bitcoin purchases.

Despite the IMF agreement, President Bukele has stated that the government will continue to purchase Bitcoin. The country's Bitcoin reserves now total 6,101.18 BTC, valued at over $535 million at current prices. Bukele declared on social media platform X: "If it didn't stop when the world ostracized us, it won't stop now."