‘It Was Very Refreshing,’ Says El Salvador Top Crypto Regulator on U.S. SEC Meeting

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El Salvador’s Comisión Nacional de Activos Digitales (CNAD), the company answerable for regulating digital belongings within the Central American nation, is searching for to ascertain a cross-border regulatory sandbox with the U.S. Securities and Exchange Commission (SEC).

“We want to create international collaboration,” Juan Carlos Reyes, president of the CNAD, advised CoinDesk in an interview. “Our biggest message is that digital assets don’t have any geographical barriers. Collaboration with regulators should not have international barriers either.”

El Salvador is in a novel state of affairs in that it didn’t boast of robust monetary establishments, and even of an present ecosystem of builders, when President Nayib Bukele made bitcoin authorized tender in 2021. That means the CNAD was capable of begin with a clean slate when it launched a regulatory framework tailor-made to crypto.

Almost two years later after Reyes took over the company, El Salvador’s superior regulatory framework has incentivized crypto giants equivalent to Tether, Bitfinex and Binance to open store within the nation.

The concept, Reyes mentioned, is for the U.S. SEC to now use El Salvador as a reside, real-world case research to guage streamlined regulatory approaches for digital belongings — in different phrases, for the SEC to study from El Salvador’s expertise because it revamps its personal regulatory framework in a post-Gensler world.

The pilot program proposed by the CNAD includes totally different situations: a U.S.-licensed conventional finance dealer acquiring a digital asset license below CNAD laws, and the event of two small-scale tokenization choices facilitated by a CNAD-licensed tokenization firm. Each situation can be capped at $10,000.

These initiatives would assist a number of the targets laid out by SEC Commissioner Hester Peirce in February, when she wrote that the SEC Crypto Task Force, which she now leads, would take a really totally different strategy in direction of crypto regulation from right here on out.

“CNAD really looked at [Pierce’s document] with a critical eye as to how we can help,” Erica Perkin, proprietor of The Perkin Law Firm and a member of CNAD’s advisory group, advised CoinDesk. “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.”

The CNAD met with the SEC’s Crypto Task Force on April 22 to debate the initiative. The assembly was constructive, in response to Reyes and Perkin. “They asked good questions,” Perkin mentioned. “They’re in an information-gathering phase. They were engaged and open to discussion.”

Reyes has already signed regulatory cooperation agreements with international locations equivalent to Argentina and Paraguay. In his view, the SEC appears to be forward of the curve relating to understanding the regulatory wants of digital belongings, whereas regulators in different jurisdictions have tended to see crypto regulation from a conventional finance perspective.

“The quality of people that make up the SEC Crypto Task Force is quite impressive. They get it. They understand the technology,” Reyes mentioned. “We were able to have discussions that were on point about what’s needed in order to regulate the technology… It was very refreshing.”



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