El Salvador has thrown its weight behind dollar stablecoins for cross-border payments, five years after it became the first country to make Bitcoin legal tender. On September 29, the Palo Alto startup Modveon and Coinbase announced the national launch of Sivar, a payments and community app that settles transfers in stablecoins on Base, Coinbase’s Ethereum layer-2 network. The same day, El Salvador’s Bitcoin Office denied that the government backs the app at all, calling the framing false and insisting the state runs no crypto wallets.
The launch lands at an awkward moment for the country’s Bitcoin experiment. Remittances sent through crypto wallets made up less than 1 percent of the roughly $9 billion El Salvador received last year, according to central bank data. A University of Central America survey found 92 percent of Salvadorans had not used Bitcoin by 2024. The IMF, which extended a $1.4 billion loan program to the country, pushed it to roll back mandatory Bitcoin acceptance in 2025 and later confirmed that no public funds had been used for Bitcoin purchases since mid-2025.
What Sivar actually does
Sivar combines payments with identity and community features. Users verify their accounts with the national identity card, the DUI, and can then join communities organized down to the district level, post content, vote in polls and, eventually, take part in local elections from abroad. The payments leg is the part drawing attention from the crypto industry: eligible senders in the United States fund a transfer from a debit card through Coinbase Onramp, the value moves as a stablecoin on Base, and recipients in El Salvador withdraw cash at more than 1,000 locations.
The fee is a flat $2 per transfer regardless of the amount sent. Each user gets a non-custodial wallet inside the app, and Coinbase says its infrastructure handles the payment flow end to end so users never need to touch blockchain tooling. More than 25,000 Salvadorans registered during a phased rollout before the national launch.
“Salvadorans send billions of dollars home every year, and too much of it disappears into fees. Bringing that cost down to a flat fee, settled in seconds, is exactly what modern payment rails were supposed to do,” said Faryar Shirzad, Coinbase’s chief policy officer.
Modveon signed a five-year agreement with AAB, the Agencia Administradora de Fondos Bitcoin, a Salvadoran public institution, under which the startup develops and operates the app. AAB is also an investor in Modveon, which raised $10 million in February from backers including Coinbase Ventures. Chief executive Nana Murugesan called Sivar the first national deployment of the company’s Verified Operating System and told Bloomberg the contract carries a multimillion-dollar fee the company did not disclose.
The denial that followed the launch
Within hours of the announcement, El Salvador’s Bitcoin Office issued a statement saying the government is not backing or planning to operate Sivar. The office said the state has no plans to launch or run any Bitcoin, cryptocurrency or stablecoin wallet, and that its involvement in wallets ended when Chivo, the state wallet from the 2021 Bitcoin rollout, was sold to private operators. It characterized claims of government support for Sivar as false.
The dispute matters because the two sides describe the same project differently. Bloomberg reported the app as a government-backed platform, and the Modveon press release namechecks President Nayib Bukele directly. The Bitcoin Office statement draws a line between a private company signing a contract with a public agency and the state operating a wallet, which the IMF program effectively prohibits.
The gap also reflects the constraints the IMF deal placed on El Salvador’s crypto policy. Under the 40-month Extended Fund Facility agreed in early 2025, private-sector Bitcoin acceptance became voluntary, taxes must be paid in dollars, and public-sector accumulation of Bitcoin was capped. A September IMF review confirmed that Bitcoin added to the national reserve since June 2025 came from private donations, not public money, and said no further accumulation beyond documented donations is expected. The reserve stands at roughly 7,789 BTC, worth about $630 million at current prices.
Why Bitcoin never became everyday money
The numbers behind the pivot are blunt. El Salvador’s central bank recorded $41.11 million in remittances through crypto wallets in the first seven months of 2026 against $5.92 billion in total family remittances, about 0.69 percent. For the full first half of the year, crypto channels carried $35.4 million of $5.06 billion in inflows. Remittances are a large share of the country’s external income, and roughly 92 percent of them come from the United States, which makes the US-El Salvador corridor the obvious target for any payments product.
| Measure | Figure | Period |
|---|---|---|
| Total remittances | $5.92 billion | Jan-Jul 2026 |
| Remittances via crypto wallets | $41.11 million | Jan-Jul 2026 |
| Crypto share of flows | 0.69% | Jan-Jul 2026 |
| Salvadorans who had not used Bitcoin | 92% | 2024 survey |
| Strategic Bitcoin Reserve | ~7,789 BTC | Sept 2026 |
Bitcoin’s volatility was the core problem for payments. A worker sending $200 home cannot afford the value dropping 3 percent before the recipient cashes out. A dollar stablecoin removes that risk while keeping the other advantages crypto rails promise: fast settlement and low fees. Murugesan drew the distinction explicitly, telling Bloomberg that El Salvador keeps embracing Bitcoin as a treasury asset and store of value, but that for moving money, “you can’t beat stablecoins.”
Whether the economics actually deliver is less certain. A Bank of Italy study found stablecoin remittances are not necessarily cheaper than banks, with costs reaching 9 percent in some corridors once on-ramps and off-ramps are counted. Sivar’s flat $2 fee only holds if users fund transfers through the app’s own rails rather than routing around it, and the company has not published volume targets or a fee schedule for cash withdrawals.
What it means for the region and for Coinbase
For Coinbase, Sivar is a country-scale proof point for its payments infrastructure push, which also includes a partnership with Citi announced a day earlier to let corporate clients accept stablecoin payments. The company has been signing distribution deals with banks and payment firms through 2026, and a national deployment, even one the local government publicly disowns, gives its Base network a flagship remittance corridor.
For El Salvador, the pivot is a quiet admission about the limits of the 2021 experiment. The state keeps its Bitcoin reserve, its education programs and its capital gains exemption for Bitcoin profits. What it is not doing is asking its citizens to spend Bitcoin at the store. The payments layer now runs on dollars, on a private company’s app, on a network built by an American exchange.
Bukele’s political opponents have already made the Bitcoin strategy an issue ahead of the 2027 election. The Sivar launch hands them a clean line: five years after the world’s most famous Bitcoin bet, the country’s newest national payment app does not use Bitcoin at all. The reserve stays. The payments move on.