What Is El Salvador’s Currency Called?
Discover El Salvador's unique monetary system, exploring its official legal tenders and their practical application.
El Salvador uses a distinctive monetary system, featuring more than one legal tender. This dual-currency approach, a result of significant economic decisions, influences daily life and financial transactions within the country.
El Salvador’s Official Currencies
The primary official currency in El Salvador is the United States Dollar (USD). The country adopted the U.S. Dollar as legal tender on January 1, 2001, replacing the Salvadoran Colón. This dollarization aimed to foster economic stability, mitigate inflation, reduce interest rates, and attract foreign investment. The Colón, while technically still legal tender, is no longer in circulation and rarely encountered.
Alongside the U.S. Dollar, Bitcoin also holds legal tender status in El Salvador. Adopted in September 2021, El Salvador became the first country globally to do so. This adoption aimed to promote financial inclusion for the unbanked population and streamline remittances, a substantial portion of the country’s gross domestic product. Both currencies have legal standing, though their practical usage varies significantly.
Using Currency in El Salvador
The U.S. Dollar remains the dominant currency for everyday transactions across El Salvador. Prices for goods and services are denominated in dollars, and wages are paid in USD. U.S. dollar banknotes and coins are used daily, and ATMs dispense dollars, making transactions straightforward for residents and visitors. Credit and debit cards are also widely accepted, particularly in urban areas and tourist destinations.
Bitcoin’s usage, while legally recognized, is less prevalent in daily commerce compared to the U.S. Dollar. The government introduced the Chivo Wallet, a digital application to facilitate Bitcoin transactions, and offered a $30 incentive to encourage adoption. Many users discontinued using the Chivo Wallet after spending this bonus. Reports from early 2025 indicate a low percentage of Salvadorans use Bitcoin for transactions, with many businesses not accepting it or preferring USD.
Recent policy adjustments, influenced by international financial bodies, have altered Bitcoin’s role. While Bitcoin maintains its legal tender status, businesses are no longer obligated to accept it, and its use for tax payments has been discontinued. This shift means Bitcoin can still be used for private trade, but its acceptance is now voluntary for merchants. This contrasts with the widespread use of the U.S. Dollar, which remains the standard for most purchases and financial activities.