Comisión Nacionalde activos Digitales (CNAD) of El Salvador, the agency responsible for regulating digital assets in Central America, is looking to establish a cross-border regulatory sandbox with the US Securities and Exchange Commission (SEC).
“We want to create international collaborations,” CNAD president Juan Carlos Reyes told Coindesk in an interview. “Our biggest message is that digital assets do not have geographical barriers. Collaboration with regulators should not have international barriers either.”
El Salvador is unique in that when President Naive Bukere made Bitcoin into legal currency in 2021, it doesn’t boast a strong financial institution or an existing ecosystem of developers. In other words, CNAD could start with a blank slate when it introduced a regulatory framework tailored to crypto.
Almost two years after Reyes took over the institution, El Salvador’s advanced regulatory framework encouraged crypto giants such as Tether, Bitfinex and Binance to open domestically.
The idea, according to Reyes, is that the US SEC currently uses El Salvador as a live, real-world case study to assess a streamlined regulatory approach to digital assets.
The pilot program proposed by CNAD includes a variety of scenarios. Development of two small tokenized products facilitated by traditional financial brokers of US licenses to acquire digital asset licenses under CNAD regulations and by CNAD license tokenization companies. Each scenario closes at $10,000.
These initiatives support some of the purposes laid out by SEC Commissioner Hester Perth in February.
“The CNAD (Pierce’s document) looked at a critical look at how we can help,” Erica Perkin, owner of Perkin’s law firm and member of CNAD’s advisory group, told Coindesk. “We’re here. Data (SEC) might want to collect. It’s difficult to collect in the US. We’ve built enough agile framework to tackle the exact issues the SEC is looking at.
CNAD met with the SEC’s Cryptographic Task Force on April 22 to discuss the initiative. According to Reyes and Parkin, the meeting was constructive. “They asked good questions,” Parkin said. “They were in the information gathering stage. They were engaged and open to debate.”
Reyes has already signed regulatory cooperation agreements with countries such as Argentina and Paraguay. In his view, the SEC appears to be ahead of the curve when it comes to understanding the regulatory needs of digital assets, but regulators in other jurisdictions have tended to look at crypto regulations from a traditional financial perspective.
“The quality of the people who make up the SEC Crypto Task Force is very impressive. They get it. They understand technology,” Reyes said. “We were able to have an important discussion about what we need to regulate technology, and it was very refreshing.”
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
