Key Takeaways:
U.S. and Salvadoran officials discussed a cross-border regulatory sandbox focused on tokenization. The effort is meant to provide U.S. regulators with real-world data on token classification and broker-dealer roles. El Salvador’s digital asset agency would oversee the pilots, drawing on its existing tokenization framework.The U.S. Securities and Exchange Commission’s Crypto Task Force met on April 22 with representatives from the El Salvador National Commission on Digital Assets (CNAD), Perkin Law Firm, and retired Goldman Sachs partner Heather Shemilt.
According to a memorandum summarizing the discussion, the meeting focused on a proposal to establish a cross-border sandbox for digital assets, with El Salvador offering its regulatory infrastructure as a testing ground.
Live Sandbox Targets Real Estate and Capital Markets
The project would involve a U.S.-licensed broker working with a Salvadoran tokenization firm on two small-scale pilots: one for real estate tokenization and another for token-based capital raising.
Under the proposal, participants would commit limited capital, capped at $10,000 per scenario.
The goal is to generate practical data for the SEC on token classification, custody solutions, and how digital assets might fit within U.S. regulatory frameworks without triggering full securities treatment.
The initiative is framed around several policy priorities previously outlined by Commissioner Hester Peirce, including alternative offering models and regulatory clarity for broker-dealers.
If accepted, the pilot would serve as a live case study to inform future rulemaking.
Bitcoin Services Shrink Sharply in El Salvador
Participants argue that El Salvador’s framework offers a functional, real-world model.
The CNAD has implemented tokenization projects across asset classes and developed risk matrices that the proposal suggests could inform U.S. approaches.
A recent review by El Salvador’s Central Reserve Bank shows that nearly 90% of the country’s registered Bitcoin service providers are now inactive.
Just 20 firms remain operational—down from 181 initially registered—raising doubts about the viability of the legal and commercial frameworks put in place since Bitcoin was adopted as legal tender in 2021.
While the state continues to hold over 6,100 BTC and pursues broader tech ambitions, including partnerships around AI and the construction of a “Bitcoin City Airport,” the rapid fade-out of Bitcoin services on the ground suggests a widening gap between the administration’s public vision and market realities.
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