In a significant move for the burgeoning cryptocurrency landscape in Latin America, El Salvador has entered a regulatory agreement with Paraguay aimed at enhancing cooperation in the crypto sector. This initiative follows a Memorandum of Understanding (MOU) signed last Friday between Paraguay’s Secretaría de Prevención de Lavado de Dinero o Bienes (SEPRELAD) and El Salvador’s Comisión Nacional de Activos Digitales (CNAD).
The primary goal of this MOU is to facilitate collaboration between the two institutions, focusing on the regulation and oversight of cryptocurrency operations. According to a statement released on SEPRELAD’s website, the agreement will also bolster efforts to detect and control unlicensed crypto activities within Paraguay, alongside strengthening anti-money laundering practices.
“El Salvador continues to share its trajectory and success in the field of digital assets, strengthening international alliances to build a more connected and transparent future,” remarked CNAD President Juan Carlos Reyes on X. He emphasized that this agreement not only encourages innovation but also safeguards financial integrity in an increasingly borderless economy.
Inquiries made regarding the specifics of the partnership led Reyes to reference a statement issued by the Central Bank of Paraguay, which clarified that cryptocurrencies remain unregistered and unauthorized by both the central bank and the Superintendencia de Valores—an entity established in 2023 and operating under the central bank’s umbrella. Citizens were thus advised to refrain from engaging with crypto organizations that lack official authorization.
Reyes underscored the significance of the regulatory agreement between SEPRELAD and CNAD, implying its pivotal role in facilitating a more structured approach to cryptocurrency in Paraguay. However, he refrained from delving into specific details about the potential framework that this partnership might establish in the South American nation.
El Salvador’s CNAD has notably crafted one of the most sophisticated cryptocurrency regulatory frameworks globally. Designed explicitly to regulate digital assets, the CNAD’s technology-first approach has garnered acclaim from crypto firms benefiting from El Salvador’s Digital Asset Service Provider (DASP) license. The CNAD serves as the sole regulatory entry point for all digital assets within the country, making it clear that any operation lacking a CNAD license is operating illegally.
The nature of the agreement with Paraguay raises questions about whether a similar regulatory structure will be instituted in Paraguay, fostering a well-regulated cryptocurrency market akin to El Salvador’s. This effort is not isolated, as El Salvador has also previously signed a crypto regulatory agreement with Argentina’s Comisión Nacional de Valores (CNV).
“At CNAD, we have two core objectives when pursuing international collaboration,” Reyes stated in a past interview. “We aim to share our expertise with international partners, allowing them to reap the benefits of a well-regulated industry. Additionally, we seek to expand the international presence of our regulated entities by establishing strategic partnerships with countries across the globe.”
As the partnership between El Salvador and Paraguay unfolds, the implications for the regional cryptocurrency landscape could be profound, potentially influencing regulatory frameworks and practices throughout Central and South America.
