El Salvador’s National Commission of Digital Assets met with the SEC’s Crypto Task Force to discuss a cross-border regulatory sandbox for cryptocurrency. Two pilot programmes are proposed, costing under $10,000, involving partnerships between U.S. brokers and Salvadoran firms. The initiative aims to gather data and enhance regulatory frameworks, particularly leveraging El Salvador’s experience with tokenization.
On the 5th of October, 2023, El Salvador’s National Commission of Digital Assets (CNAD) engaged in discussions with the SEC’s Crypto Task Force regarding a proposal to establish a cross-border regulatory sandbox for cryptocurrency initiatives. The intention is to pilot two programmes, each costing under $10,000, where a broker from the United States collaborates with a Salvadoran tokenization enterprise. This approach aims to furnish key insights in line with the Task Force’s principal regulatory objectives.
The meeting, which is documented on the SEC’s log, foregrounded discussions on El Salvador’s collaboration agenda, including priorities that align with Commissioner Hester Peirce’s initial declaration concerning the Crypto Task Force’s formation. Notably, one of the primary objectives is the establishment of a cross-border sandbox, envisioned as a practical case study to explore regulatory approaches to digital assets and enhance innovation within the U.S. market.
The proposed sandbox involves two scenarios: Scenario 1 entails a partnership where a U.S.-based real estate broker collaborates with a Salvadoran tokenization firm, allowing investors to acquire tokenized property shares. Scenario 2 focuses on evaluating the firms’ capabilities in capital-raising through tokenized shares—a project that is yet unspecified and unrelated to real estate. This structure is designed to yield vital data for the SEC concerning transnational business operations in El Salvador.
Officials from both nations participated alongside digital asset legal expert Erica Perkin and former Goldman Sachs partner Heather Shemilt. Although the meeting resulted in significant discussions, there appears to be no formal agreement reached at this juncture, as the Task Force’s attendance was limited to staff members without the presence of any Commissioners. Nonetheless, this cooperative venture with El Salvador presents a unique opportunity for the SEC to acquire meaningful data at a relatively low cost, addressing half of its most pressing regulatory priorities effectively.
