Key highlights:
- El Salvador launches Sivar with Modveon to connect citizens, businesses, and government institutions
- Stablecoins power cross-border payments, with transfers settled on Coinbase’s Base network
- Bitcoin remains part of El Salvador’s strategy, but its role in everyday payments is changing
El Salvador is bringing stablecoins into a new national digital platform called Sivar, marking another major milestone in the country’s stablecoin push. The platform allows users to send cross-border payments using stablecoins, raising fresh questions about the potential role of Bitcoin in everyday payments.
El Salvador launches Sivar with stablecoin payments
According to the latest reports, El Salvador has launched Sivar, partnering with Palo Alto-based startup Modveon. Sivar is a digital platform that connects citizens with verified communities, businesses, and government institutions.
The country has reportedly signed a five-year agreement with Modveon. Under this agreement, Modveon will operate and expand Sivar, along with its digital services, across the country. Additionally, the platform will also support cross-border payments, allowing eligible users in the US to send money to verified recipients in El Salvador for a flat $2 fee.
Sivar uses Coinbase and Base for stablecoin transfers
Notably, El Salvador’s new payment system is built around USDC, rather than Bitcoin. Sivar uses Coinbase’s infrastructure and settles transfers on Base. Thus, US people can fund their Sivar wallets through supported Coinbase methods. These include bank accounts and cards. In an X post, Coinbase stated:
“Salvadorans sent $9B home last year. Percentage fees took millions of it. Modveon’s Sivar now uses Coinbase infrastructure and Base to let US users send any amount to El Salvador for a flat $2. Transfer to off-ramp, all included.”
The major vision of the latest move is to make cross-border payments simpler. The country intends to make transfers more effective without relying entirely on traditional payment methods. Sivar also combines the payment feature with verified identities, communities, and government services. Thus, Sivar is more than just a crypto wallet.
Is Bitcoin losing momentum?
It is worth noting that Bitcoin’s role in El Salvador’s payment system has seen major changes since it became the legal tender. Last year, the IMF’s interference limited the government’s involvement in Bitcoin-related transactions. The public sector’s participation in the Chivo wallet has also faced challenges.
Now, the government’s choice of USDT instead of Bitcoin is raising concerns about BTC’s losing momentum. Modveon CEO Nana Murugesan stated:
“El Salvador keeps embracing Bitcoin when it comes to treasury and as a store of value. But from a money movement point of view, President Bukele is very committed to the fastest, cheapest and most trusted way of moving money, and you can’t beat stablecoins.”
This does not mean BTC has completely disappeared from the country’s crypto strategy. The cryptocurrency continues to be held as part of El Salvador’s national reserves.
The latest move only suggests that stablecoins may be taking a more practical role in cross-border transactions. Thus, Sivar does not mark the end of Bitcoin payments in El Salvador. Instead, it shows how stablecoins are becoming a more accepted payment option.
Source:: El Salvador Embraces Stablecoins via Sivar: Is Bitcoin’s Payment Role Shrinking?