- 7 Dec 2025
- Elara Crowthorne
- 1
Remittance Fee Calculator: Chivo vs Traditional Services
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Calculate how much you'd save by using Chivo wallet instead of traditional services like Western Union. Chivo offered $0 fees for Bitcoin transactions.
El Salvador made history in September 2021 when it became the first country in the world to make Bitcoin legal tender. At the center of that move was the Chivo wallet - a government-backed app designed to let every Salvadoran send, receive, and spend Bitcoin without fees. The idea was simple: cut out expensive remittance middlemen, bring the unbanked into the financial system, and modernize the economy. But what looked like a bold leap forward turned into a messy, complicated reality.
Why Chivo Was Built
El Salvador’s economy runs on money sent home from abroad. Remittances make up nearly 20% of the country’s GDP. For years, families relied on Western Union and MoneyGram to get cash from relatives in the U.S. - paying up to 10% in fees for every transfer. That’s hundreds of millions of dollars lost every year just in transaction costs. The government’s answer was Chivo. Launched on September 7, 2021, the app let users send Bitcoin instantly, for free, between phones. It also held U.S. dollars, so people could switch between the two currencies. To get people to try it, the government dropped $30 in Bitcoin into every account that downloaded the app. Over 46% of the population installed it in the first few weeks. On paper, it was a success. But adoption wasn’t the same as usage. Most people downloaded Chivo for the free $30 - then stopped using it.The Technical Nightmare
Chivo wasn’t built by a startup. It was built by AlphaPoint, a U.S.-based fintech firm with experience in crypto infrastructure. But scaling a national wallet for 6 million people? That’s a whole different level. Within days, the app crashed. Users couldn’t log in. Transactions failed. Some people lost access to their $30. Others reported identity theft - strangers using stolen IDs to open Chivo accounts and drain funds. The government blamed internet outages. Experts blamed poor testing. The system wasn’t ready. It couldn’t handle the load. Customer service was overwhelmed. People who needed to send money to family couldn’t. The very people Chivo was meant to help got locked out.Bitcoin’s Volatility Hit Hard
Here’s the thing no one talked about enough: Bitcoin isn’t stable. At launch, Bitcoin was around $50,000. By mid-2022, it had dropped to $16,000. That meant the $30 bonus many people got was worth less than $10. Some users who converted Bitcoin to dollars to pay for groceries lost money overnight. A shop owner in San Miguel might accept Bitcoin for a $10 meal. But if Bitcoin drops 20% in a day, that $10 becomes $8 in real value. No one wants to run a business on a rollercoaster. Many businesses started refusing Bitcoin - even though it was legal tender. The government tried to fix this by creating a Bitcoin trust fund to instantly convert Bitcoin to dollars at the point of sale. But the system was clunky. Often, the conversion didn’t work. People got confused. Trust eroded.
Most People Just Didn’t Get It
A 2024 survey found that 8 out of 10 Salvadorans didn’t use Bitcoin for daily transactions. Why? Because they didn’t understand it. They didn’t know how to secure their private keys. They didn’t trust something they couldn’t hold. They didn’t want to gamble their family’s money on a coin that could lose half its value in a week. The government ran TV ads, held street fairs, and trained teachers to explain Bitcoin. But you can’t force financial literacy. You can’t mandate trust. People didn’t need a government app - they needed reliability. And Bitcoin, at least in its current form, isn’t reliable for daily spending.The IMF’s Ultimatum
By late 2024, El Salvador’s economy was under strain. Inflation was rising. The peso was weak. The country needed a $1.4 billion loan from the International Monetary Fund (IMF). The IMF’s condition? Stop treating Bitcoin as legal tender. It wasn’t about ideology. It was about risk. The IMF said holding Bitcoin on the government’s balance sheet was a financial danger. They pointed to the price swings, the lack of regulatory oversight, and the potential for capital flight. In January 2025, El Salvador officially removed Bitcoin’s legal tender status. It didn’t ban Bitcoin. It just stopped forcing businesses to accept it. The Chivo wallet didn’t disappear - but its role changed. The government stopped funding it. Public sector use ended. By July 2025, all government-owned Bitcoin in Chivo was moved out.
What’s Left Now?
Chivo still exists. People can still use it. But it’s no longer the national project it once was. The $30 incentive is gone. The government no longer promotes it. The app still works - but it’s just another wallet now, competing with PayPal, Wise, and local banks. The government didn’t give up on crypto. In March 2025, it bought more Bitcoin, bringing its total reserve to 6,102 coins - worth about $500 million. It also passed the Digital Assets Issuance Act (LEAD), creating a new regulator, the National Commission of Digital Assets (CNAD), to oversee private crypto businesses. El Salvador is no longer trying to turn everyone into a Bitcoin user. It’s now trying to become a hub for crypto companies - attracting startups, developers, and investors who want to build on crypto infrastructure, without forcing it on citizens.Lessons Learned
The Chivo experiment didn’t fail because Bitcoin is bad. It failed because the rollout ignored human behavior. You can’t force people to adopt technology they don’t understand. You can’t solve poverty with a wallet. You can’t stabilize an economy with a volatile asset - not without safeguards, education, and time. But it wasn’t a total loss. Chivo proved one thing: people in El Salvador want faster, cheaper ways to move money. And they’re willing to try new tools if they’re simple, reliable, and safe. The real win? The world is watching. Countries from Nigeria to Argentina are now studying what happened. Some are considering CBDCs - central bank digital currencies - instead of Bitcoin. Others are building private-sector wallets with better UX and stronger security. El Salvador didn’t change the world by making Bitcoin legal tender. It changed the world by showing how hard it is to do.What Happens Next?
The future of crypto in El Salvador isn’t about every citizen using Chivo. It’s about private companies using the legal framework built under LEAD to offer better crypto services. Think of it like this: instead of forcing everyone to drive electric cars, the government built the charging stations and let the market decide who wants to use them. Chivo’s legacy isn’t in its usage stats. It’s in the doors it opened. It proved that a small country can lead a global financial experiment - even if it doesn’t work perfectly. And sometimes, that’s more valuable than success.Is Chivo wallet still active in 2025?
Yes, Chivo wallet is still active, but it no longer has government backing or promotion. Users can still download and use it to send and receive Bitcoin and U.S. dollars, but the $30 incentive is gone, and the government no longer uses it for public transactions. It now operates as a private fintech app, competing with other wallets like PayPal and Wise.
Why did El Salvador remove Bitcoin as legal tender?
El Salvador removed Bitcoin’s legal tender status in January 2025 after agreeing to conditions from the International Monetary Fund (IMF) for a $1.4 billion loan. The IMF cited Bitcoin’s extreme price volatility, lack of regulatory oversight, and risks to financial stability as reasons. The government agreed to stop requiring businesses to accept Bitcoin and to wind down public sector use of the Chivo wallet by July 2025.
Did Chivo wallet help reduce remittance fees?
For the small percentage of users who actively used Chivo for remittances, yes - it cut fees from 10% down to zero. But since most Salvadorans didn’t use the app regularly, the overall impact on remittance costs was limited. Traditional services like Western Union still dominate because they’re familiar and reliable, even if they’re more expensive.
How many people actually used Chivo wallet regularly?
About 46% of Salvadorans downloaded the app at launch, but a 2024 survey showed only about 20% used it regularly for transactions. Most people downloaded it for the $30 bonus and then stopped. The gap between download numbers and actual usage was one of the biggest signs that the policy didn’t match real behavior.
Is Bitcoin still legal in El Salvador?
Yes, Bitcoin is still legal to own, trade, and use in El Salvador. But it is no longer legal tender - meaning businesses are not required to accept it as payment for goods and services. The government still holds Bitcoin in its Strategic Reserve and supports private crypto businesses through the National Commission of Digital Assets (CNAD).
What happened to the $30 given to Chivo users?
The $30 was a one-time incentive to encourage downloads. It was deposited in Bitcoin and automatically converted to U.S. dollars if users didn’t use it. Many users cashed out immediately, especially when Bitcoin’s price dropped. The government stopped funding the incentive in 2022, and no new deposits have been made since.
Did Chivo wallet improve financial inclusion?
It had potential, but it didn’t deliver. While 70% of Salvadorans were unbanked, Chivo didn’t solve the root problems - lack of trust, low digital literacy, and unstable currency value. Many people who downloaded the app didn’t understand how to use Bitcoin safely. True financial inclusion requires education, stability, and consistent access - none of which Chivo fully provided.
1 Comments
Bitcoin isn't the problem. The problem is treating finance like a tech demo. You don't fix poverty with a wallet. You fix it with stability, education, and trust. Chivo was a beautiful idea built on sand.
El Salvador didn't fail because of Bitcoin. They failed because they confused symbolism with substance.