El Salvador tokenization sandbox efforts are advancing, as the country’s National Commission for Digital Assets (CNAD) has formally proposed the creation of a joint regulatory sandbox with the U.S. Securities and Exchange Commission (SEC). The initiative, backed by Perkin Law Firm and former Goldman Sachs partner Hester Shemilt, aims to develop a controlled space where regulators from both nations can observe real-world applications of digital assets.
El Salvador Tokenization Sandbox: Real-World Crypto Testing
The proposed sandbox would allow El Salvador and the U.S. to cooperate on tokenization oversight before enforcing stricter rules. According to CNAD, the sandbox will help regulators evaluate how tokenized securities, real estate, and small business investments function in practice. El Salvador, which recognized Bitcoin as legal tender in 2021, offers its regulatory experience to guide the collaboration.
Pilot Programs to Test Tokenized Securities
CNAD’s proposal includes two pilot programs:
- Real Estate Tokenization: A U.S.-licensed broker would receive a limited license from CNAD to offer tokenized real estate shares. Each investor could contribute up to $10,000. This model will test whether such tokenized assets qualify as securities under U.S. law.
- Tokenized Small Business Equity: A Salvadoran company would raise capital by offering tokenized shares. Regulators will evaluate if U.S. crowdfunding laws can apply to this blockchain-based model.
These initiatives are designed to enhance investor protection while helping regulators create practical and adaptive crypto rules.
Global Push for Crypto Regulation Innovation
SEC Commissioner Hester Peirce has previously advocated for cross-border regulatory sandboxes. In 2023, she proposed a similar framework with the U.K. to trial tokenized security settlements. The El Salvador tokenization sandbox aligns with this vision and may become a global model for collaborative digital asset oversight.
