El Salvador Proposes Crypto Sandbox to SEC in Bold Cross-Border Move – Is Bitcoin In?

El Salvador may be paving the way for a historic crypto collaboration with the United States. On April 22, representatives from El Salvador’s National Commission on Digital Assets (CNAD), U.S. law firm Perkins Law, and former Goldman Sachs partner Heather Shemilt met with the U.S. Securities and Exchange Commission (SEC) to pitch a bold new idea: a cross-border crypto sandbox plan.

What Is the Cross-Border Crypto Sandbox Plan?

The proposal centers around creating a shared regulatory sandbox—a controlled environment where both nations can test digital asset innovations with relaxed regulatory requirements. This approach allows policymakers to learn from real-world use cases before crafting hard rules.

El Salvador, known for its pro-crypto stance since adopting Bitcoin as legal tender in 2021, aims to take the next step by co-developing a flexible framework with U.S. regulators.

Two Pilot Programs in the Works

To jumpstart the sandbox initiative, the proposal includes two small pilot projects:

1. Real Estate Tokenization:
   A U.S.-registered broker would obtain a special license in El Salvador to sell tokenized real estate shares. Each investor could contribute up to $10,000, testing how well real estate tokens function and whether they should be treated as securities under U.S. law.
2. Token-Based Fundraising for Small Businesses:
   A Salvadoran company would raise capital by offering tokenized shares to investors. The project seeks to determine whether U.S. crowdfunding laws can apply to blockchain-based fundraising.

Both pilots aim to explore regulatory clarity, investor protection, and practical use cases for crypto-based financial models.

A Strategic Move for the U.S. Too

The idea echoes past sentiments shared by SEC Commissioner Hester Peirce, who has long advocated for international regulatory cooperation and experimental frameworks in the crypto space.

El Salvador’s experience in managing crypto risks and innovation could offer the U.S. a valuable testing ground for future policy development.

Bitcoin Use in El Salvador Sees Decline

Despite high-profile Bitcoin infrastructure projects, like the proposed Bitcoin City Airport and AI-backed developments, the use of Bitcoin in El Salvador is steadily dropping. According to the country’s Central Reserve Bank, only 20 Bitcoin service providers remain active, compared to 181 in 2021 when Bitcoin became legal tender.

El Salvador still holds over 6,000 BTC, but the decline in usage raises questions about the future role of Bitcoin in the country’s digital economy.

What’s Next?

If approved by the SEC, the crypto sandbox plan could become a key step toward harmonized international crypto regulation. It may also rekindle U.S.-Latin American collaboration in digital finance and serve as a model for other countries exploring blockchain integration.

But as of now, it remains a proposal. The crypto world is watching closely to see whether this ambitious cross-border initiative becomes a regulatory breakthrough—or just another stalled idea.