El Salvador’s digital asset regulator, the National Bitcoin Office, a media popular joint regulatory sandbox with the U.S. Securities and Exchange Commission (SEC). The Comisión Nacional de Activos Digitales (CNAD) is at the helm of this effort. Its purpose is to improve international collaboration in regulating digital assets. This move comes as El Salvador seeks to leverage its advanced regulatory framework to attract international players in the crypto space.

Juan Carlos Reyes, president of the CNAD, has been leading the charge on this tri-national CSO effort to lay the groundwork for this collaboration to take place. El Salvador has positioned itself as a hub for digital asset innovation since President Nayib Bukele made bitcoin legal tender in 2021. The CNAD, responsible for regulating digital assets in El Salvador, has developed a regulatory framework that has drawn interest from crypto giants like Tether, Bitfinex, and Binance.

El Salvador took a new direction with regulation. This provided the CNAD with the ability to develop a tailored framework for crypto assets. Unlike other jurisdictions with established financial institutions and developer ecosystems, El Salvador focused on creating a regulatory environment conducive to innovation.

Erica Perkin emphasizes the power of this type of collaboration, especially given El Salvador’s unique position.

"We’re here. There's data [the SEC] might want to collect. It's difficult to collect in the U.S. … We've built a framework that's nimble enough to work on the exact issues that the SEC is looking at, and we're here to help and collect information on how we can best do that." - Erica Perkin

El Salvador is willing to share data and insights with the SEC, potentially offering a testing ground for regulatory approaches.

Under the scenario of their proposed regulatory sandbox, these would be limited to $10,000 scenarios. This sandbox will allow the CNAD and the SEC to see digital assets flourish in practice. There’s lots they can learn from these real-world applications.

The CNAD’s regulatory framework took shape nearly two years after Reyes first took head of the independent agency. His commitment to promoting greater international cooperation is one of the key motivations behind the proposed partnership with the SEC.

"We want to create international collaboration," - Juan Carlos Reyes

At the time El Salvador adopted bitcoin, it had weak financial institutions and a nonexistent developer ecosystem. Yet, its proactive pragmatic regulatory stance has made the country a magnet for crypto business seeking a safe haven. Partnering with the SEC could help improve the reputation of El Salvador. Additionally, this partnership presents the country as a cutting-edge player in the swiftly growing global digital asset market.

"CNAD really looked at [Pierce’s document] with a critical eye as to how we can help," - Erica Perkin