El Salvador”’s new national payments app Sivar launched with a government partnership announcement on September 29, and within hours the country”’s Bitcoin Office publicly denied that the government backs it at all. The app, built by Palo Alto startup Modveon with Coinbase payments infrastructure, lets US residents send money to verified recipients in El Salvador for a flat fee, settled in stablecoins on Coinbase”’s Base network. The Bitcoin Office said the state has no plans to launch or operate any crypto or stablecoin wallet and called claims of government support false.
The contradiction captures where El Salvador”’s crypto policy stands five years after it became the first country to adopt Bitcoin as legal tender. The payments experiment has quietly shifted to dollar stablecoins, while the state holds its Bitcoin reserve apart and, officially, holds no wallets at all.
What Sivar is
Sivar bundles payments with identity and community features. Users verify with the national ID card, join district-level communities, post content and vote in polls. The payments leg targets remittances: senders in the United States fund transfers from a debit card through Coinbase Onramp, value moves as a stablecoin on Base, and recipients withdraw cash at more than 1,000 locations in El Salvador. More than 25,000 Salvadorans registered during a phased rollout before launch.
Modveon signed a five-year agreement with AAB, the Agencia Administradora de Fondos Bitcoin, a Salvadoran public institution that is also an investor in the startup. Modveon raised 0 million in February from backers including Coinbase Ventures. CEO Nana Murugesan called Sivar the first national deployment of the company”’s Verified Operating System.
“Salvadorans send billions of dollars home every year, and too much of it disappears into fees,” said Faryar Shirzad, Coinbase”’s chief policy officer. The flat fee works, Coinbase argues, because money moves entirely in digital dollars rather than through percentage-based remittance rails.
Why the government distance matters
The Bitcoin Office statement draws a line the IMF program requires. Under El Salvador”’s .4 billion Extended Fund Facility, agreed in early 2025, private-sector Bitcoin acceptance became voluntary, taxes must be paid in dollars and public-sector Bitcoin accumulation was capped. A September IMF review confirmed 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.
A state-operated stablecoin wallet could complicate that arrangement. By having a private company contract with a public agency rather than the government running the app, the project stays on the private side of the IMF”’s lines, at least as the Bitcoin Office tells it. Bloomberg and the Modveon press release described the launch differently, with the release namechecking President Nayib Bukele directly.
The dispute is partly semantic but partly substantive. Chivo, the state wallet from the 2021 rollout, was wound down under IMF pressure and sold to private operators, with majority ownership and operational control transferred while the government kept a minority stake and custodial duties. The Bitcoin Office says state wallet involvement ended there.
The remittance numbers behind the pivot
El Salvador received roughly billion in remittances last year, about 92 percent of it from the United States. Central bank data show crypto wallets carried only 1.11 million of .92 billion in remittances in the first seven months of 2026, about 0.69 percent. A 2024 survey found 92 percent of Salvadorans had not used Bitcoin. Bitcoin”’s volatility made it a poor payments instrument for workers who cannot afford the value dropping before a recipient cashes out.
A dollar stablecoin removes that risk while keeping fast settlement and low fees, which is why the government-adjacent project picked stablecoins over the asset the country made famous. Murugesan told Bloomberg that El Salvador keeps embracing Bitcoin as a treasury asset and store of value, but that for moving money, you cannot beat stablecoins.
Whether stablecoin rails actually cut costs is contested. 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 fee applies to transfers funded through the app”’s own rails.
The political calendar sharpens the stakes. Municipal and legislative elections are due in early 2027, and opposition figures have campaigned against the Bitcoin bet since its volatile first year. A national app that bypasses Bitcoin entirely is easy to frame either way: as pragmatism that finally serves ordinary Salvadorans, or as retreat from the policy that defined Bukele”’s international image. The administration has so far avoided saying much publicly, letting the Bitcoin Office statement and Modveon”’s press release carry the argument.
Adoption is the open question. The 25,000 pre-launch registrations are modest against a population of 6.3 million and a diaspora of roughly 2.5 million people, most of it in the United States. Chivo struggled with the same dynamic in 2021, when a 0 signup bonus failed to produce durable usage. Sivar”’s differentiators are the flat fee, the community features and government-adjacent identity verification, none of which guarantees that senders abandon Western Union and money transfer operators that already compete aggressively on price.
Regulatory treatment in the United States matters too. Transfers funded from US debit cards and settled in stablecoins fall under US money transmission and stablecoin rules, and Coinbase”’s infrastructure gives the project a compliance footing a startup alone could not easily obtain. That is also why the government distance is convenient: if regulators probe the arrangement, the state can point to a private operator.
What it signals
For Coinbase, Sivar is a country-scale proof point for its payments infrastructure, arriving a day after the exchange expanded a payments partnership with Citi for US corporate clients. For El Salvador, the pivot is an admission about the 2021 experiment: the state keeps its reserve of roughly 7,789 BTC and its education programs, but the payments layer now runs on dollars, on a private company”’s app, on an American exchange”’s network.
Bukele”’s opponents have made the Bitcoin strategy an issue ahead of the 2027 election. The Sivar launch gives them a clean line: the country”’s newest national payment app does not use Bitcoin at all.