El Salvador Has Proposed a Cross-Border Regulatory Sandbox to the SEC

El Salvador has suggested to the U.S. Securities and Exchange Commission (SEC) that it creates a cross border regulatory sandbox for cryptocurrencies and blockchain technology.

El Salvador has proposed the creation of a cross border regulatory sandbox with the U.S. Securities and Exchange Commission (SEC) for cryptocurrencies and blockchain technology.

The suggestion, initiated by El Salvador's National Commission on Digital Assets (CNAD) and Perkin Law Firm, aims to provide a controlled environment for testing tokenization projects.

In a memo dated April 22, 2025, the SEC's Crypto Task Force is proposing the integration of El Salvador's crypto ecosystem. The initiative is intended to provide U.S. regulators with real world data.

The Task Force will be monitoring the blockchain initiatives in the sandbox without the need for rapid regulatory action. The plan is part of an initiative to promote cross border cooperation and innovation in the digital asset space.

The proposal arises from El Salvador's early adoption of Bitcoin as legal tender in 2021, and its subsequent focus on developing a comprehensive legal and regulatory framework for digital assets.

The suggestion includes the possibility of joint pilot programs, which would be subject to Anti Money Laundering (AML) and Know Your Customer (KYC) standards. Local regulations would be enforced by El Salvador's CNAD, or in the case of U.S. participation, supplemental requirements, as set by the SEC.

This initiative is a discussion topic if it succeeds because it can make the crypto policies of the world. The sandbox could become an example for other nations if it is approved.Additionally, it might encourage the United States to expedite its regulatory framework for digital assets.