The headlines read like a retreat. In April 2025, El Salvador repealed the law that made Bitcoin legal tender, and most of the coverage stopped there, at the word repealed, as though the country had reversed itself and walked away from the experiment. That is the part that traveled. The part that did not travel is what the repeal left standing, which is almost everything that matters to a person weighing the Freedom Passport.
So here is the honest version, with the dates and the decree numbers, because this is the question we are asked most often and the one most often answered wrong.
The timeline, exactly.
Bitcoin held legal-tender status in El Salvador from 7 September 2021, when the Bitcoin Law took effect, until 30 April 2025, when Decreto Legislativo No. 199 repealed that status and made private-sector acceptance voluntary. For three years and roughly eight months, a merchant was legally obliged to accept Bitcoin if a customer offered it. After 30 April 2025, that obligation ended. Acceptance became a choice, which for most of the world's commerce is what it already was.
The repeal did not arrive in a vacuum. It was negotiated alongside the International Monetary Fund's Extended Fund Facility, a roughly $1.4 billion arrangement running 40 months, which reached Board approval in February 2025. The Fund had long flagged the mandatory-acceptance provision as a fiscal and stability concern. El Salvador removed the provision the Fund objected to. It did not remove Bitcoin from the country.
What actually changed.
Two things, and they are narrower than the headlines imply. First, legal-tender status. Bitcoin is no longer money that the law compels anyone to take; the US dollar, in place since dollarization in 2001, carries that role alone. Second, mandatory acceptance. A shop that prefers dollars may now say so without breaking the law.
That is the full extent of the reversal. It is a change to the obligations of private parties inside El Salvador. For a foreign investor acquiring citizenship and holding Bitcoin abroad, neither change touches the thing being bought.
What stayed.
This is the column that matters, and it is longer.
The 0% capital-gains treatment for foreign investors on Bitcoin stayed. The repeal removed a currency designation; it did not rewrite the tax code that makes El Salvador attractive to a Bitcoiner in the first place. The strategic reserve stayed, and kept growing; the state still holds roughly 7,684 BTC as of June 2026, published transparently at bitcoin.gob.sv. The state geothermal mining program stayed, still turning volcanic energy into reserve. The Bitcoin Office stayed, under Director Stacy Herbert, and so did its mandate. And the Freedom Passport stayed, the $1,000,000 contribution route, settled in BTC or USDT, unchanged in its terms.
A country that was abandoning Bitcoin would have sold the reserve. El Salvador kept buying.
That single fact is the tell. A government performing a genuine retreat liquidates the position and quiets the office. El Salvador did the opposite: it satisfied the one provision the IMF could not live with, the coercive one, and retained every provision that signals intent. The reserve, the mining, the office, the tax posture, the passport. The architecture is intact. What was shed was the part that was always more symbolism than substance, the legal compulsion to accept a volatile asset at the till.
Refinement, not retreat.
Read this way, 2025 looks less like a reversal and more like a maturation. Mandatory legal tender was the boldest and most contested feature of the original law, and also the least load-bearing. Few merchants relied on it; many found it operationally awkward. Removing it cost El Salvador little in practice and bought a $1.4 billion IMF facility and a quieter relationship with the institutions that rate sovereign credit. The country traded a slogan for a balance sheet, and kept the Bitcoin.
If you are deciding whether El Salvador's Bitcoin commitment is real, the question to ask is not whether legal tender survived. It is whether the state still holds the coins, still mines them, still staffs the office, and still taxes foreign Bitcoin gains at zero. The answer to each is yes. . . . The conviction did not change. The packaging did.
The risk, stated plainly.
It would be dishonest to leave it there. Governance risk is not zero. A government that amended its Bitcoin framework once can amend it again, and the same legislative majority that retained the reserve could, in some future session, decide otherwise. We do not pretend that a tax rate or a program is a constitutional guarantee. We treat that risk openly on the legitimacy page, where the legal foundations of the program (Legislative Decrees No. 918 and No. 286) and the realistic exposure are laid out without flattery.
And the $1,000,000 contribution is irreversible. Once it settles, it is settled; there is no refund window and no unwinding it if policy later shifts. That is precisely why the policy question deserves a clear-eyed answer before the money moves, not a reassuring one. The honest case for El Salvador is not that nothing can change. It is that, given the chance to walk away in 2025, the country chose to stay, kept the reserve, and removed only the coercion. That is the behavior of a state that means it.
Where this leaves the passport itself is unchanged. The 0% that drew you remains the 0% on offer. The provenance work the contribution requires is covered separately in the source-of-funds playbook, and the program's full terms sit on the Freedom Passport page. If you are a US person, note that none of this alters your home-country obligations; FATCA still applies, and that is its own conversation.
Adam Juchniewicz, CEO, 21 CBI
June 2026