SEC and El Salvador Explore Cross-Border Digital Assets Sandbox Initiative

• SEC and El Salvador will launch a $10k crypto sandbox to test real estate and fundraising tokens under cross-border regulation.

• El Salvador’s Bitcoin ecosystem collapsed by 90% as only 20 out of 181 service providers remain active.

The United States Security and Exchange Commission (SEC) is in talks with El Salvador over a potential cross-border crypto sandbox. This partnership could redefine how digital assets are regulated and tested between nations. This discussion comes amidst tension between both nations about deportation policies, casting political thoughts over what could become a groundbreaking financial collaboration.

According to an April 22 meeting memo, officials from the SEC’s crypto task force sat down with El Salvador’s National Commission on Digital Assets (CNAD), attorneys from Perkins Law Firm, and former Goldman Sachs partner Heather Shemilt. Together, they explored the idea of launching small-scale crypto pilot programs that could give regulators in both countries a firsthand look at how tokenization plays out in the real world.

Under the plan, U.S.-licensed brokers could receive special permits in El Salvador to issue tokens considered non-securities. These efforts would be capped at $10,000 per test case and focus on real estate tokenization and blockchain-based fundraising—practical scenarios aimed at helping regulators better understand custody, classification, and investor risks without having to apply full-blown securities laws.

Bitcoin’s Fade in El Salvador Creates New Opportunities

While El Salvador once stood at the centre of crypto adoption after making Bitcoin a legal tender in 2021, the ground reality is shifting. A recent report from the country’s Central Reserve Bank shows that nearly 90% of registered Bitcoin service providers have now closed shop. From a peak of 181, only 20 remain operational—raising questions about whether the legal and technical frameworks established during the Bitcoin rollout were ever sustainable.

Even as high-profile projects like the AI-powered Bitcoin City Airport remain in motion, the day-to-day use of Bitcoin has clearly declined. However, El Salvador possesses more than 6,1000 BTC, which is a clear commitment to the country’s long-term interest in Bitcoin.

Here’s how the unique opportunity exists for U.S. regulators and El Salvador to partner to create a real-world model for how digital assets function when adopted into the national economy.

By working together, these two nations will gather enough data to establish smarter and more flexible rules for the future’s token-based market.

El Salvador’s Sandbox Plan Aims to Shape Global Crypto Policy

The innovation behind the idea of a crypto sandbox is not new; the difference is that this El Salvador version goes a bit further. The idea of a crypto sandbox is not about testing new technology but about building shared policy models that can guide future regulations.

SEC Commissioner Hester Peirce, a known supporter of blockchain innovation, has long called for safe spaces where digital asset experiments can take place without the fear of instant enforcement.

If the plan gets greenlight, it could spark a new wave of international cooperation in crypto regulation. Other countries watching from the sidelines might soon consider similar pilot programs, using El Salvador as a role model.

But until the SEC signs off, it’s still just a pitch. Whether this sandbox leads to lasting policy change or becomes another what-could-have-been moment remains to be seen.

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