El Salvador chooses stablecoins for $9B transfers

TLDR

El Salvador is testing a stablecoin-based remittance app targeting its roughly $9 billion annual transfers, while officials insist this is not a government pivot away from Bitcoin.

1. A new private app called Sivar uses dollar-pegged stablecoins on Coinbases Base network to move remittances from the United States to El Salvadors $9 billion corridor for a flat $2 fee.
2. El Salvadors National Bitcoin Office says the government is not backing Sivar, denies any stablecoin pivot, and continues to accumulate Bitcoin as a strategic reserve asset.
3. The move highlights a split role where stablecoins may handle everyday remittances while Bitcoin remains a long term macro bet, with adoption depending on cost, cash-out access and regulation.

Deep Dive

1. How Sivar Uses Stablecoins

According to a detailed report, El Salvadors remittance strategy now includes Sivar, an app developed by Modveon that routes payments via dollar-backed stablecoins on Coinbases Base network, targeting about $9 billion in yearly transfers that support roughly 1.6 million Salvadorans living abroad, mostly in the United States El Salvador targets $9 billion in transfers, but chooses stablecoins.

US senders fund transfers by debit card and see dollar amounts, while the backend converts to digital dollars (stablecoins) and sends them on-chain; recipients in El Salvador can cash out in fiat at more than 1,000 locations, paying a flat $2 per transaction regardless of size.

Sivar abstracts away direct crypto handling for users, keeping everything denominated in USD to avoid Bitcoins price volatility, which previously made day to day use difficult.

2. Government Role And Bitcoin Policy

Reports framed Sivar as evidence that El Salvador chose stablecoins over Bitcoin, but the National Bitcoin Office has explicitly rejected that narrative, calling claims of a government stablecoin pivot fake news and stating it has no plans to launch or operate any bitcoin, crypto or stablecoin wallet after selling the Chivo wallet to private operators El Salvador denies stablecoin pivot.

Separate coverage clarifies that Sivar is a private app built by Modveon using Coinbase infrastructure, with the government saying it does not back or operate the service Sivar app not backed by government.

At the same time, officials highlight that Bitcoin remains legal tender and part of a national reserve, reportedly increasing sovereign holdings by 30 BTC in the last 30 days to around 7,790 BTC.

3. Why This Stablecoin Shift Matters

Sivar joins other stablecoin remittance efforts in El Salvador, including MoneyGrams USDC service and Tethers expanded presence, suggesting that for cross border payments, dollar-pegged tokens may be gaining practical traction faster than Bitcoin El Salvador targets $9 billion in transfers, but chooses stablecoins.

The key open questions are whether Sivars flat $2 fee can undercut traditional remittance costs at scale, how robust its cash-out network and compliance controls prove in practice, and how regulators in both the US and El Salvador view stablecoin-based corridors.

If Sivar and similar services grow, a likely equilibrium is Bitcoin as a strategic, macro asset on the state balance sheet, with stablecoins handling day to day remittances and payments where predictability and dollar denomination matter most.

Confidence: moderate, because sources agree on Sivars design and fee model but differ on how far the pivot narrative really goes.

Conclusion

El Salvadors remittance rails are evolving toward dollar stablecoins through private apps like Sivar that promise cheaper, faster cross border transfers, while the state keeps Bitcoin as a legal tender reserve asset.

For crypto users, this illustrates a practical division of labor where stablecoins dominate payments and remittances, and Bitcoin fills a longer term, higher volatility role, with future policy and user adoption deciding how durable that split becomes.