El Salvador’s National Commission of Digital Assets (CNAD) met with the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force on April 22, 2025. The meeting focused on potential collaboration and knowledge-sharing between the two regulatory bodies.
CNAD President Juan Carlos Reyes described the encounter as “very refreshing,” highlighting the constructive nature of the dialogue. The discussion centered on creating a cross-border regulatory sandbox, a initiative aimed at fostering international cooperation in digital asset oversight.
A New Model for International Regulatory Collaboration
El Salvador has emerged as a pioneering nation in cryptocurrency regulation since adopting Bitcoin as legal tender in 2021. Unlike traditional financial hubs, the country developed its regulatory framework from the ground up, specifically for digital assets.
This forward-thinking approach has attracted major industry players like Tether, Bitfinex, and Binance to establish operations within El Salvador. The country now aims to serve as a real-world case study for other regulators exploring efficient frameworks for governing digital assets.
Reyes emphasized the borderless nature of digital assets, stating that regulatory collaboration should similarly transcend international boundaries. The proposed sandbox would enable U.S.-licensed financial brokers to operate under CNAD regulations and facilitate small-scale tokenization projects.
The Proposed Regulatory Sandbox Initiative
The pilot program put forward by El Salvador’s regulatory body includes two primary components:
- A traditional finance broker licensed in the U.S. obtaining a digital asset license under CNAD regulations
- Development of small-scale tokenization offerings facilitated by a CNAD-licensed tokenization company
Each scenario would operate with a capped value of $10,000, allowing for controlled testing of regulatory approaches. This initiative aligns with objectives outlined by SEC Commissioner Hester Peirce, who leads the Crypto Task Force and has advocated for a fresh approach to digital asset regulation.
Erica Perkin of The Perkin Law Firm, a member of CNAD’s advisory group, noted that El Salvador’s regulatory framework offers valuable real-world data that U.S. regulators might find difficult to collect domestically. The country’s nimble regulatory structure addresses many of the issues currently under consideration by the SEC.
Building on Existing International Partnerships
El Salvador’s CNAD has already established regulatory cooperation agreements with several countries, including Argentina and Paraguay. These agreements aim to support the development of cryptocurrency industries across participating nations.
According to Reyes, the SEC appears ahead of many other regulators in understanding the unique requirements of digital asset oversight. He specifically praised the quality and technological understanding demonstrated by members of the SEC Crypto Task Force.
The April meeting represented an information-gathering phase for both parties, with constructive dialogue and engaged questioning from SEC representatives. Both sides expressed openness to continued discussion and collaboration.
The Path Forward for Cross-Border Crypto Regulation
This developing partnership between U.S. and Salvadoran regulators signals a potential shift in how digital assets might be governed across international borders. By establishing formal channels of cooperation, regulators can better address the challenges posed by decentralized technologies that operate beyond traditional jurisdictional boundaries.
The collaborative approach may serve as a model for other nations seeking to balance innovation with consumer protection in the digital asset space. As regulatory frameworks continue to evolve, such international partnerships could become increasingly important for effective oversight.
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Frequently Asked Questions
What was the purpose of the meeting between El Salvador's CNAD and the U.S. SEC?
The meeting focused on discussing a potential cross-border regulatory sandbox that would allow for collaboration between U.S. and Salvadoran regulators. The initiative aims to create a framework for testing digital asset regulations in a controlled environment.
How does El Salvador's regulatory approach differ from traditional models?
El Salvador developed its digital asset regulatory framework from scratch rather than adapting existing financial regulations. This tailored approach has allowed for more flexibility and innovation in governing cryptocurrency activities within the country.
What specific projects are proposed under the regulatory sandbox?
The pilot program includes scenarios where U.S.-licensed financial brokers operate under CNAD regulations and the development of small-scale tokenization offerings. Each test case would have a maximum value of $10,000 to limit risk during the experimental phase.
Why is international collaboration important for cryptocurrency regulation?
Digital assets operate across borders without geographical limitations, making international cooperation essential for effective oversight. Collaborative efforts help regulators share knowledge, address common challenges, and create consistent standards.
What other countries has El Salvador partnered with on crypto regulation?
El Salvador's CNAD has already signed regulatory cooperation agreements with Argentina and Paraguay. These partnerships aim to support the development of cryptocurrency industries across Latin America through shared knowledge and resources.
How did representatives describe the April meeting between regulators?
Both sides described the meeting as constructive and refreshing. SEC representatives asked thoughtful questions and demonstrated openness to discussion, while El Salvador's regulators appreciated the technological understanding shown by their U.S. counterparts.