El Salvador’s President Nayib Bukele has unveiled a proposal to amend the Digital Assets Emission Law, a key piece of legislation enacted last year.
This new initiative announced through the Ministry of Economy, aims to enhance the country’s cryptocurrency framework by expanding the role of the National Digital Assets Commission (CNAD).
The proposed changes are designed to bolster the regulation of Bitcoin transactions and strengthen El Salvador’s position as a global leader in financial innovation.
Exchanges would be required to register with CNAD
Under the proposed reform, Bitcoin service providers—including exchanges, custodians, and payment processors—would be required to register with the CNAD.
This move is intended to enforce stringent anti-money laundering measures, ensure the protection of customer funds, and implement robust cybersecurity protocols.
The CNAD would be responsible for overseeing the registration process, issuing or revoking operational permits, and setting ethical standards for these entities.
Additionally, the CNAD would gain increased authority over various aspects of the cryptocurrency market, including fee structures, tax rates, and overall market surveillance.
This expanded role aims to align El Salvador with international best practices and recommendations from the Financial Action Task Force (FATF).
Addressing illegal activities related to Bitcoin
The primary goal of the proposed reforms is to bring El Salvador into compliance with the “Anti-Money Laundering and Asset Law” and prepare the country for the FATF’s upcoming review in October.
By implementing these measures, the government hopes to enhance transparency in Bitcoin transactions, mitigate market risks, and impose penalties on non-compliant businesses.
El Salvador’s reform plan seeks to address potential illegal activities related to Bitcoin transactions and improve regulatory standards.
By adopting a framework modeled after FATF recommendations, the country aims to fortify its position in the cryptocurrency market, increase investor confidence, and protect the integrity of digital asset transactions.
El Salvador’s initiative to amend its cryptocurrency regulations reflects a proactive approach to market monitoring and international compliance.
The country’s commitment to adhering to global best practices and implementing rigorous regulatory measures underscores its ambition to foster a secure and transparent environment for Bitcoin transactions.
The proposed changes also signal El Salvador’s intent to set a benchmark for effective cryptocurrency regulation.
By establishing a robust regulatory framework through the CNAD, the country hopes to inspire other jurisdictions to adopt similar measures, contributing to a more secure and open digital asset market.
New regulations expected to enhance market stability
As El Salvador moves forward with its proposed regulatory changes, the impact on the cryptocurrency sector could be significant.
The new regulations are expected to enhance market stability, reduce risks associated with digital assets, and improve overall investor protection.
By aligning with international standards and implementing comprehensive oversight, El Salvador aims to solidify its role as a pioneer in the evolving cryptocurrency landscape.
President Bukele’s proposal represents a critical step towards ensuring the safety and integrity of Bitcoin transactions in El Salvador.
Through the introduction of stringent regulations and the strengthening of the CNAD’s role, the country is poised to enhance its cryptocurrency framework and reinforce its position as a global leader in digital asset innovation.
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