Emma Nelson 
El Salvador and Paraguay Strengthen Crypto Regulations Through Historic Agreement. On March 7, 2025, El Salvador and Paraguay signed a groundbreaking Memorandum of Understanding (MOU) aimed at enhancing the oversight of digital asset service providers. This significant step was taken to improve cross-border cooperation in regulating the cryptocurrency market, marking a new phase in their commitment to addressing the growing influence of digital assets. The agreement was signed between Paraguay’s Secretariat for the Prevention of Money Laundering (SEPRELAD) and El Salvador’s National Commission of Digital Assets (CNAD).
El Salvador
Key Focus of the Agreement: Strengthening Oversight of Crypto Activities
The MOU outlines the main objectives of enhancing regulatory cooperation between the two countries. Specifically, it aims to better monitor digital asset service providers, prevent unlicensed crypto activities, and curb illicit financial practices such as money laundering and terrorist financing. With both countries working in tandem, the agreement emphasizes the importance of a unified approach to tackling these challenges in the ever-evolving cryptocurrency ecosystem.
Juan Carlos Reyes García, President of CNAD, expressed his confidence in the collaboration, highlighting that it would not only drive innovation but also ensure financial stability in a global digital economy. According to Reyes, the partnership would bring greater transparency to the crypto sector, with both countries benefiting from enhanced data exchange and stronger regulatory frameworks.
Paraguay’s Approach to Crypto Regulation
Paraguay has recently reaffirmed its position on cryptocurrencies, with the Central Bank of Paraguay making it clear that digital assets are not authorized or regulated by the bank. This policy was clarified by Paraguay’s Superintendencia de Valores, which was established in 2023. As a result, Paraguay has urged its citizens to exercise caution when dealing with unregulated crypto entities. This caution has underscored the need for a more comprehensive regulatory framework to ensure the safe development of the digital asset sector.
Reyes noted that the regulatory agreement between Paraguay and El Salvador would help bridge the gap between the nations’ differing regulatory landscapes. While details remain scarce regarding whether Paraguay will adopt a licensing system like El Salvador’s, the partnership’s core objective is to promote transparency and safeguard digital assets’ integrity across borders.
El Salvador’s Expanding Role in Crypto Regulation
El Salvador has long been a leader in integrating Bitcoin into its national economy. The country has previously signed an agreement with Argentina’s Comisión Nacional de Valores (CNV) in December 2024, which aimed to improve regulatory cooperation between the two nations on digital assets. The CNAD, as El Salvador’s regulatory body for digital assets, is responsible for overseeing and licensing Digital Asset Service Providers (DASPs), a key element in the country’s growing crypto economy.
Despite facing restrictions from the International Monetary Fund (IMF), El Salvador continues to expand its Bitcoin reserves. The country’s Bitcoin holdings now total 6,111 BTC, valued at approximately $507.88 million. Additionally, El Salvador has ramped up its Bitcoin acquisition, purchasing 40 BTC in the last month alone, signaling its determination to increase its digital asset reserves before the IMF-imposed deadline in July 2025.
This continued investment in Bitcoin comes amidst significant price fluctuations in the market, particularly after the recent downturn that affected major institutional holders like MicroStrategy, which has seen its stock drop by over 49% since last November. Nevertheless, El Salvador’s aggressive Bitcoin acquisition strategy highlights the country’s commitment to positioning itself as a leader in the crypto sector, despite short-term volatility.
The Broader Impact of the Agreement and What’s Next
The strategic agreement between El Salvador and Paraguay represents a significant step toward solidifying regulatory oversight within the cryptocurrency market. As the digital asset market continues to grow, the need for stronger regulatory frameworks becomes more pressing. By working together, El Salvador and Paraguay aim to create a more secure and transparent environment for cryptocurrencies, potentially setting the stage for other nations to follow suit.
Looking ahead, the partnership’s success could drive further cooperation across the region, particularly in aligning policies that address the challenges of regulating digital assets. With rising institutional interest, evolving regulatory frameworks, and a growing emphasis on compliance, El Salvador and Paraguay’s agreement is a vital development that could have a lasting impact on the future of digital assets in Latin America and beyond.
