Bitcoin and digital assets are legal in El Salvador, with the country publicly embracing cryptocurrency as part of its investment promotion strategy El Salvador - United States Department of State

The primary regulatory authority for digital assets is the Comisión Nacional de Activos Digitales (CNAD), which oversees the issuance and public offering of digital assets under the Digital Assets Issuance Law Digital Assets - CNAD

A licensing regime exists for digital asset service providers, requiring authorization from the CNAD to operate in El Salvador, though the framework is still in its early implementation stages Digital Assets - CNAD

The regulatory framework is considered "favorable" and includes tax incentives designed to attract international cryptocurrency firms to relocate to El Salvador El Salvador - United States Department of State

International cryptocurrency firms have announced plans to relocate to El Salvador, indicating the practical viability of the regulatory regime, though specific licensed entities must be verified with the CNAD directly El Salvador - United States Department of State

Comisión Nacional de Activos Digitales (CNAD) is the central regulatory authority for digital assets in El Salvador, serving as the national digital asset commission Digital Assets - CNAD

The CNAD is responsible for authorizing public offerings of digital assets and registering digital asset service providers Digital Assets - CNAD

The Investment and Export Promotion Agency (INVEST) is the government entity that supports investment in the "Bitcoin and digital assets" sector, one of eight priority investment sectors identified by the government El Salvador - United States Department of State

The Central Bank of El Salvador monitors and reports on foreign direct investment flows, including data relevant to the digital asset sector El Salvador - United States Department of State

The Digital Assets Issuance Law (Ley de Emisión de Activos Digitales) is the foundational legislation governing digital asset securities and public offerings in El Salvador, administered by the CNAD Digital Assets - CNAD

The Digital Assets Issuance Law provides the legal framework for the CNAD to authorize public offerings of digital assets and to register digital asset service providers Digital Assets - CNAD

The law applies to virtual assets, cryptocurrencies, and digital asset securities issued or offered in El Salvador, with the CNAD acting as the competent authority Digital Assets - CNAD

The Investments Law grants equal treatment to foreign and domestic investors, which applies to digital asset businesses as it does to all other investment sectors El Salvador - United States Department of State

The Simplified Administrative Procedures Law requires government entities to perform a Regulatory Impact Analysis (RIA) and provide a 15-day public comment period before adopting or amending regulations, including those for digital assets El Salvador - United States Department of State

El Salvador has been a World Trade Organization (WTO) member since 1995, with its latest trade policy review completed on April 20, 2023 El Salvador - United States Department of State

The OECD completed a Multi-Dimensional Review of El Salvador on April 18, 2023, and ranked El Salvador in the top 10 leading reformers in Latin America in trade facilitation El Salvador - United States Department of State

El Salvador entered into a $1.4 billion economic reform program with the International Monetary Fund (IMF) in February 2025, which includes commitments to reform implementation that could affect the digital asset regulatory landscape El Salvador - United States Department of State

El Salvador is a signatory of the WTO Investment Facilitation for Development Agreement El Salvador - United States Department of State

El Salvador has 16 bilateral investment treaties in force and is one of five Central American Common Market countries with a multilateral investment treaty El Salvador - United States Department of State

Digital asset issuers seeking to conduct public offerings of digital assets in El Salvador must obtain prior authorization from the CNAD under the Digital Assets Issuance Law Digital Assets - CNAD

Digital asset service providers (including exchanges, wallets, and other intermediary services) must be registered with the CNAD as a condition of operating in El Salvador Digital Assets - CNAD

Any entity engaged in the public offering of digital asset securities must apply for and receive authorization from the CNAD before commencing operations Digital Assets - CNAD

The CNAD's authorization requirement applies to both domestic and foreign entities seeking to conduct digital asset-related activities within El Salvador's jurisdiction Digital Assets - CNAD

Public offerings of digital assets, including digital asset securities, require CNAD authorization Digital Assets - CNAD

The operation of digital asset service platforms and intermediaries requires registration with the CNAD Digital Assets - CNAD

The issuance of digital assets to the public in El Salvador falls under the regulatory scope of the CNAD Digital Assets - CNAD

Digital asset exchanges and trading platforms operating in El Salvador are subject to CNAD registration requirements Digital Assets - CNAD

The Digital Assets Issuance Law provides for the CNAD to establish requirements for digital asset issuers and service providers, though specific capital thresholds are not publicly detailed in the available documentation Digital Assets - CNAD

For investors establishing new businesses in El Salvador, foreign investors may freely establish any type of domestic business, subject only to limitations imposed on micro businesses defined as having 10 or fewer employees and yearly sales of $175,930 or less El Salvador - United States Department of State

Simplified joint-stock companies (SAS) can be registered with no cost and a minimum capital requirement of only one dollar El Salvador - United States Department of State

Entities seeking CNAD authorization must submit an application demonstrating compliance with the Digital Assets Issuance Law and the CNAD's regulatory requirements Digital Assets - CNAD

Business registration in El Salvador can be completed within three days through the online Miempresa portal, which allows new businesses to formalize registration and conduct administrative operations online El Salvador - United States Department of State

The CNAD reviews digital asset applications in accordance with the Digital Assets Issuance Law, with specific timelines dependent on the complexity of the proposed offering Digital Assets - CNAD

The regulatory framework is still developing, with the CNAD continuing to implement its authorization and registration procedures Digital Assets - CNAD

Issuers must operate through a legal entity established in El Salvador or authorized to do business in the country Digital Assets - CNAD

Compliance with the CNAD's white paper and disclosure requirements is mandatory for public offerings of digital assets Digital Assets - CNAD

Digital asset service providers must maintain internal controls and procedures consistent with CNAD requirements Digital Assets - CNAD

The Investment and Export Promotion Agency (INVEST) supports investors in the Bitcoin and digital assets sector by providing information about applicable laws, regulations, and procedures El Salvador - United States Department of State

No specific names of licensed digital asset entities are publicly confirmed in the available sources. The CNAD's framework is designed to authorize qualifying digital asset issuers and service providers, and international cryptocurrency firms have announced plans to relocate to El Salvador, but no specific licensed entities are named in the provided documentation El Salvador - United States Department of State

The government has publicly embraced cryptocurrency and created favorable regulations and tax incentives to attract digital asset businesses, suggesting the licensing framework is operational El Salvador - United States Department of State

The regulatory framework for digital assets in El Salvador, administered by the CNAD, includes anti-money laundering and counter-terrorism financing requirements applicable to digital asset issuers and service providers Digital Assets - CNAD

Digital Asset Service Providers must be duly registered and authorized to operate in El Salvador and in their country of incorporation, which includes compliance with applicable AML regulations Digital Assets - CNAD

The Digital Assets Issuance Law requires issuers to meet transparency and disclosure standards as a condition of CNAD authorization, which encompasses compliance with AML/KYC obligations Digital Assets - CNAD

These requirements apply in addition to El Salvador's general AML framework, which was implemented through the country's regulatory agencies and institutions El Salvador - United States Department of State

Companies operating in El Salvador note that regulatory agencies are often understaffed and inexperienced in dealing with complex issues, which may affect the practical enforcement of AML/KYC requirements in the digital asset sector El Salvador - United States Department of State

No specific enforcement actions against digital asset entities in El Salvador are documented in the provided sources.

El Salvador's regulatory enforcement capacity for digital assets is still developing, with the CNAD in the process of implementing its oversight framework Digital Assets - CNAD

The 2024 repeal of the 2017 ban on metal mining and the passage of the General Law on Metallic Mining demonstrates the government's willingness to change regulatory frameworks through legislative action, though this pertains to mining rather than digital assets El Salvador - United States Department of State

The Court of Accounts (CCR) audits financial statements and budget execution of all ministries and agencies, including potentially those involved in digital asset regulation, but did not publish any audit results in 2024 El Salvador - United States Department of State

El Salvador offers tax incentives as part of its strategy to attract international cryptocurrency firms and digital asset businesses to relocate to the country El Salvador - United States Department of State

The government's favorable tax treatment of cryptocurrency is one of three key factors—along with public embrace of cryptocurrency and favorable regulations—that have led international cryptocurrency firms to announce plans to relocate to El Salvador El Salvador - United States Department of State

El Salvador uses the U.S. dollar as legal tender, which provides a stable currency environment for digital asset transactions and tax calculations El Salvador - United States Department of State

Detailed tax guidance specific to digital assets and cryptocurrency transactions is not publicly detailed in the available sources; however, the government has explicitly promoted tax incentives as a tool to attract digital asset businesses El Salvador - United States Department of State

El Salvador does not have a bilateral taxation treaty with the United States, which can affect cross-border digital asset transactions between the two countries El Salvador - United States Department of State

Regulatory implementation gaps: The regulatory agencies in El Salvador are often understaffed and inexperienced in dealing with complex issues, which can affect the consistent enforcement and practical application of digital asset regulations El Salvador - United States Department of State

Lack of published regulations: The government does not use a centralized online portal to publish regulatory actions, and the Legislative Assembly is not required to publish draft legislation or solicit comments on pending legislation, creating transparency challenges for digital asset businesses El Salvador - United States Department of State

Discretionary application of rules: The discretionary application of rules can complicate routine transactions, including those in the digital asset sector, with companies noting that laws and regulations have been enacted without adhering to established notice and comment procedures El Salvador - United States Department of State

Financial stability concerns: The $1.4 billion IMF program includes commitments to meet agreed metrics and milestones, and failure to do so "could weigh on economic sentiment," creating financial stability risks for digital asset businesses operating in El Salvador El Salvador - United States Department of State

IMF program compliance risk: Success of the 40-month IMF economic reform program depends on implementation of reforms, and the digital asset sector may face regulatory adjustments as El Salvador works to satisfy IMF commitments El Salvador - United States Department of State

Due diligence burdens: Digital Asset Service Providers must demonstrate they are duly registered and authorized to operate in their country of incorporation, which creates additional regulatory burdens for international firms seeking to enter El Salvador Digital Assets - CNAD

Security and infrastructure concerns: Weak cybersecurity and digital infrastructure in El Salvador present operational risks for digital asset platforms El Salvador - United States Department of State

Informal economy: The informal sector makes up an estimated 70 percent of El Salvador's economy, which could create challenges for digital asset businesses seeking to engage with the broader market El Salvador - United States Department of State

Uncertainty regarding licensing implementation: The CNAD's digital asset framework is developing, and the practical implementation of licensing and registration requirements is still being refined, creating uncertainty for market participants Digital Assets - CNAD

Government accountability gaps: The Court of Accounts did not publish any audit results in 2024, and government accountability remains insufficient, creating broader governance risks for businesses operating in El Salvador El Salvador - United States Department of State

No bilateral tax treaty with the United States: The absence of a taxation treaty between El Salvador and the United States complicates cross-border digital asset transactions and may impact investment structures El Salvador - United States Department of State

El Salvador - United States Department of State

MEMORANDUM To: Crypto Task Force Meeting Log From: Crypto Task Force Staff