El Salvador has officially entered into a regulatory partnership with Paraguay, marking another step in the region’s growing focus on digital asset governance. The agreement, signed between El Salvador’s Comisión Nacional de Activos Digitales (CNAD) and Paraguay’s Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELAD), establishes a framework for cooperation on cryptocurrency regulation.
The Memorandum of Understanding (MOU), finalized last Friday, aims to facilitate collaboration in monitoring the crypto sector, enhancing oversight mechanisms, and addressing financial crimes linked to digital assets.
According to SEPRELAD, a key aspect of the agreement involves detecting and controlling unlicensed crypto operations within Paraguay’s borders while reinforcing anti-money laundering (AML) practices.
“Both parties shall establish relations for technical cooperation between the institutions that represent the authorities and assist in the exercise of effective supervision of Digital (Virtual) Asset Service Providers, as well as the exchange of experiences and technical and regulatory knowledge on the matter, including but not limited to issues related to the traceability of digital assets, use of blockchain intelligence tools, entry controls for digital asset service providers, and risk analysis,” the announcement stated
As Latin American nations continue integrating crypto into their financial frameworks, such regulatory collaborations are becoming more common. With El Salvador pioneering national-level Bitcoin adoption and Paraguay exploring tighter oversight measures, this agreement reflects the efforts of governments striving to balance innovation with financial security in the evolving digital economy.
“By their nature, digital assets know no geographical barriers. In order to proactively and effectively supervise them, it is imperative to establish agreements such as this one, which not only strengthen local capacity, but also contribute to a more coordinated and robust global supervision. In that sense, this alliance will foster innovation and protect the financial integrity of both countries.”
El Salvador’s Leadership in Crypto Regulation
El Salvador continues solidifying its position as a global leader in cryptocurrency regulation, with its Comisión Nacional de Activos Digitales (CNAD) at the forefront of digital asset oversight.
The CNAD operates as the single regulatory authority for all crypto-related activities in the country, requiring any entity engaging in digital asset services to obtain a Digital Asset Service Provider (DASP) license. This technology-first approach has won praise from international crypto firms, positioning El Salvador as one of the most structured and forward-thinking jurisdictions for digital assets.
While the newly signed agreement with Paraguay aims to enhance oversight and anti-money laundering (AML) measures, it remains unclear whether the South American nation will adopt a regulatory model similar to El Salvador’s. The CNAD’s framework ensures that any unlicensed crypto activity in the country is illegal, a strict but clear-cut approach to digital asset governance.
This latest partnership follows a similar agreement El Salvador signed with Argentina’s Comisión Nacional de Valores (CNV) in December, reflecting its broader strategy of fostering regulatory cooperation in Latin America. As more nations look to establish clearer guidelines for digital assets, El Salvador’s expanding network of agreements could influence how crypto is regulated across the region.
Regional Trends in Cryptocurrency Adoption
This collaboration between El Salvador and Paraguay is part of a broader trend in Latin America, where countries are increasingly engaging with cryptocurrencies. In December 2022, Brazil established a licensing regime for virtual asset service providers, aiming to legalize crypto as a payment method.
Similarly, Puerto Rico has been exploring regulatory frameworks for blockchain technology and digital currencies, with legislative hearings and proposed bills to integrate these technologies into its financial system.
Quick Facts:
- El Salvador and Paraguay signed an MOU to collaborate on cryptocurrency regulation.
- The agreement focuses on detecting unlicensed crypto operations and strengthening AML practices.
- This is El Salvador’s second crypto regulatory partnership in three months.
- Other Latin American countries, like Brazil and Puerto Rico, are also advancing cryptocurrency regulations.
