“It Was Quite Invigorating,” States El Salvador’s Leading Crypto Regulator Regarding U.S. SEC Gathering
El Salvador’s Comisión Nacional de Activos Digitales (CNAD), the agency responsible for regulating digital assets in the Central American nation, aims to establish a cross-border regulatory sandbox with the U.S. Securities and Exchange Commission (SEC). “We want to create international collaboration,” Juan Carlos Reyes, president of the CNAD, stated during an interview. “Our main message is that digital assets don’t have geographical barriers. Collaboration with regulators should not have international barriers either.”
El Salvador finds itself in a unique position, having lacked strong financial institutions and a robust ecosystem of developers when President Nayib Bukele declared bitcoin legal tender in 2021. This situation enabled the CNAD to craft a regulatory framework specifically designed for crypto, starting from ground zero.
Nearly two years after Reyes took over the agency, El Salvador’s advanced regulatory framework has attracted prominent crypto firms such as Tether, Bitfinex, and Binance to establish operations in the country. The objective, according to Reyes, is for the U.S. SEC to use El Salvador as a live, real-world case study to assess streamlined regulatory approaches for digital assets — essentially enabling the SEC to learn from El Salvador’s experiences while revising its own regulatory framework.
The pilot program proposed by the CNAD includes various scenarios: a U.S.-licensed traditional finance broker obtaining a digital asset license under CNAD regulations and the development of two small-scale tokenization offerings through a CNAD-licensed tokenization company. Each initiative would be limited to $10,000.
These efforts align with the goals outlined by SEC Commissioner Hester Peirce in February, where she indicated that the SEC Crypto Task Force, which she currently leads, would adopt a substantially different stance on crypto regulation moving forward. “CNAD critically examined [Peirce’s document] to assess how we can contribute,” Erica Perkin, owner of The Perkin Law Firm and a CNAD advisory group member, remarked. “We’re here. There’s data [the SEC] might want to collect. It’s challenging to gather this in the U.S. … We’ve developed a framework that is agile enough to address the specific issues the SEC is looking at, and we’re prepared to assist in gathering information on how we can effectively do that.”
The CNAD recently engaged with the SEC’s Crypto Task Force on April 22 to discuss this initiative. Reyes and Perkin both described the meeting as productive. “They posed insightful questions,” Perkin noted. “They are in an information-gathering phase and were engaged and open to dialogue.”
Reyes has already signed regulatory cooperation agreements with countries such as Argentina and Paraguay. He believes that the SEC is ahead of other jurisdictions in grasping the regulatory requirements for digital assets, while many other regulators continue to view crypto regulation through a traditional finance lens. “The caliber of professionals involved in the SEC Crypto Task Force is impressive. They understand the technology,” Reyes shared. “We were able to have focused discussions about what is necessary to effectively regulate the technology… It was very refreshing.”
