SEC and El Salvador Explore Cross-Border Digital Asset Sandbox

On April 22, the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force met with officials from El Salvador’s National Commission on Digital Assets (CNAD), attorneys from Perkin Law Firm, and retired Goldman Sachs partner Heather Shemilt. A memorandum summarizing the meeting revealed discussions around a proposal to establish a cross-border digital asset sandbox, leveraging El Salvador’s regulatory ecosystem as a testing ground for emerging financial technologies.

Pilot Projects Focused on Real Estate and Capital Raising

The proposal outlines two pilot programs: one centered on real estate tokenization and another on raising capital through token issuance. A U.S.-licensed broker would collaborate with a Salvadoran tokenization firm on both initiatives.

Each pilot would be limited to $10,000 in capital commitment, aiming to provide the SEC with real-world insights into token classification, custody, and the potential role of digital assets within U.S. regulatory frameworks—without immediately triggering traditional securities laws.

The initiative aligns with policy themes championed by SEC Commissioner Hester Peirce, such as the exploration of alternative offering models and clearer guidelines for broker-dealers.

If greenlit, the pilots would serve as practical case studies to guide future regulatory developments in the U.S.

Advocates say El Salvador’s experience with tokenization offers a valuable reference point for U.S. regulators. The CNAD has rolled out asset tokenization projects and developed comprehensive risk matrices, which the proposal suggests could help shape American regulatory approaches.

Bitcoin Service Providers Decline in El Salvador

Despite its pioneering move to adopt Bitcoin as legal tender in 2021, El Salvador’s domestic Bitcoin ecosystem is shrinking. A recent report from the Central Reserve Bank found that nearly 90% of registered Bitcoin service providers in the country are now inactive. Of the original 181 firms, only 20 remain operational.

While the government continues to hold over 6,100 BTC and push ahead with tech-forward initiatives—such as AI collaborations and plans for a “Bitcoin City Airport”—the steep drop in active service providers highlights a growing disconnect between state-led ambitions and actual market traction.