Majority of Bitcoin companies in El Salvador are not operational | Monitoring Bitcoin Usage

A recent report from El Salvador’s central bank reveals that only 11% of the Bitcoin service providers registered in the country are currently operational. Out of a total of 181 companies listed, only 20 have managed to meet the legal standards set by the Bitcoin Law in El Salvador. This law, which designated Bitcoin as legal tender in the country, requires these firms to adhere to strict regulations, including implementing anti-money laundering measures and accurately recording their assets and liabilities. Additionally, companies are mandated to establish cybersecurity programs that are tailored to the specific nature of their services.

Unfortunately, a significant 89% of the registered providers in El Salvador have failed to comply with these legal requirements, rendering them non-operational. However, there are a few exceptions, such as the government-backed Chivo Wallet, Crypto Trading & Investment, and Fintech Américas, which have successfully met all the necessary criteria to operate within the boundaries of the law.

President Nayib Bukele remains steadfast in his commitment to continue purchasing Bitcoin, despite the International Monetary Fund’s request to halt any public sector Bitcoin purchases. This decision highlights the government’s unwavering support for Bitcoin and its integration into the country’s financial system.

The challenges faced by Bitcoin service providers in El Salvador underscore the complexities of transitioning to a Bitcoin-based economy and the importance of adhering to regulatory requirements. It is crucial for companies operating in this sector to prioritize compliance with the law to ensure the integrity and security of their operations. By implementing robust anti-money laundering measures and cybersecurity programs, these firms can not only meet legal standards but also build trust with customers and stakeholders in the emerging Bitcoin market.

As the landscape of digital currencies continues to evolve, it is essential for countries like El Salvador to adapt their regulatory frameworks to accommodate these changes. The government’s support for Bitcoin as legal tender represents a significant shift in the financial sector, and it is vital for businesses to align with these regulations to ensure their long-term sustainability and success in this new digital economy.