El Salvador's Transformation into Crypto's Newest Powerhouse

Today we're diving into what might be one of the most fascinating and least understood stories of 2025 — El Salvador's transformation into crypto's newest powerhouse.

El Salvador's pivot from being a Bitcoin maximalist nation to thinking bigger is fascinating. Especially when you consider the country's new goal of becoming Latin America's premier crypto financial center.

But what happens when a Bitcoin maximalist nation decides to think bigger? And how does this fit into the broader narrative of Trump's crypto ambitions?

Let's connect the dots and see where the crypto breadcrumb trail leads us...

March 2023

El Salvador made headlines when it announced plans to build a "Bitcoin City" at the base of the Conchagua volcano, powered by geothermal energy and boasting a circular design.

The city would be a special economic zone governed by its own laws, aiming to attract crypto businesses and enthusiasts.

While the concept generated excitement within the crypto community, it also faced criticism and skepticism from both local residents and international observers.

Fast forward to January 2025.

As the world obsesses over Bitcoin ETFs and Trump's return to the political stage, something else is quietly unfolding in El Salvador.

While Bitcoin City stalls, the country is orchestrating a pivot in crypto history.

El Salvador is no longer just pushing for Bitcoin adoption. Instead, it's making moves to transform itself into crypto's newest (and most strategic) financial hub.

And it all started with a $1.3 billion negotiation that nobody saw coming...

The Great Pivot

For years, El Salvador's crypto identity has been synonymous with one thing: Bitcoin.

But behind the scenes, another narrative has been quietly unfolding.

When Nayib Bukele first made Bitcoin legal tender in 2021, the International Monetary Fund was not impressed.

The organisation, which has historically influenced developing economies through lending programs, saw Bitcoin adoption as a threat to financial stability.

The stakes were high: El Salvador needed a $1.3 billion loan package from the IMF.

But for four years, negotiations stalled, primarily due to the country's aggressive Bitcoin stance, particularly its law requiring all businesses to accept Bitcoin as payment.

A 2024 study showed that despite the mandatory acceptance law, only 7.5% of El Salvador's population actively used Bitcoin for transactions.

The implementation costs were also substantial, including developing the state-run Chivo wallet and setting up a nationwide Bitcoin ATM network.

By late 2024, something had to give. El Salvador needed the IMF loan, but Bukele — fresh off re-election and sitting on paper profits from his Bitcoin strategy — wasn't about to abandon crypto entirely.

Instead, he orchestrated a clever pivot.

Bitcoin acceptance would become optional rather than mandatory.

The state-run Chivo wallet would be wound down.

Government Bitcoin purchases would continue, but more strategically.

A new focus would emerge on broader crypto infrastructure.

This wasn't capitulation — it was transformation.

El Salvador's rapid transformation into a crypto hub comes now — just as the country appears to be softening its Bitcoin stance.

But appearances can be deceiving.

The Tether Effect

When Tether announced its relocation to El Salvador in January 2025, it wasn't just another corporate reshuffle.

This is the world's third-largest cryptocurrency by market cap — a $140 billion behemoth that facilitates a significant portion of all crypto trading — choosing to leave the British Virgin Islands for Central America.

The move came with significant baggage. Tether has faced its share of scrutiny — from an $18.5 million settlement with New York state in 2021 to ongoing questions about its reserves. Yet El Salvador welcomed them with open arms, granting a coveted Digital Asset Service Provider license.

Why? Because Tether brings more than just its headquarters — it brings an entire ecosystem.

Tether is not alone.

Bitfinex Derivatives (a long-time Tether ally) swapped its Seychelles address for El Salvador, securing its own DASP license. Their stated goal? To help transform El Salvador into "a financial services centre for Latin America."

Bitget followed suit with a Bitcoin Service Provider license, signalling their intent to offer a full suite of crypto services in the country.

And now enters Rumble?

Yes, the right-leaning video platform that recently received a $775 million investment from Tether.

Nayib Bukele encouraged Rumble CEO Chris Pavolvski to relocate.

This isn't just any tech company — it's one backed by some of the most influential figures in American tech-politics:

Peter Thiel (PayPal co-founder)

JD Vance (Trump's vice president-elect)

A 2021 funding round that valued it at $500 million

Now, after allocating part of its reserves to Bitcoin and receiving Tether's massive investment, Rumble is eyeing El Salvador as its potential new home.

The Infrastructure Play

El Salvador