El Salvador Signs Major Agreement To Strengthen Crypto Regulations

El Salvador and Paraguay have signed an agreement to enhance oversight of digital asset service providers.

The Memorandum of Understanding (MOU) was signed on March 7, 2025, between Paraguay’s Secretariat for the Prevention of Money Laundering (SEPRELAD) and El Salvador’s National Commission of Digital Assets (CNAD). The agreement aims to strengthen cooperation in supervising cryptocurrency-related activities.

El Salvador Agreement To Strengthen Crypto Regulations

According to a press release, the agreement focuses on monitoring digital asset service providers and preventing unauthorized operations in both countries. SEPRELAD and CNAD will work together to detect and control unlicensed crypto activities.

Authorities aim to enhance regulations on money laundering, terrorist financing, and the proliferation of weapons of mass destruction. Moreover, CNAD President Juan Carlos Reyes García emphasized the importance of cross-border collaboration.

“This agreement not only fosters innovation but also ensures financial integrity in a borderless economy,” Reyes posted on X.

Concurrently, SEPRELAD stated on its website that the agreement will help Paraguay and El Salvador exchange information and strengthen regulatory frameworks.

Paraguay Approach to Crypto Oversight

The Central Bank of Paraguay has recently reaffirmed its stance on cryptocurrencies. It stated that digital assets are not registered or authorized by the central bank or the country’s Superintendencia de Valores, which was established in 2023. The bank advised citizens to avoid interacting with unregulated crypto entities.

Reyes pointed to this statement as a reason why the regulatory agreement is essential. He did not provide further details on whether Paraguay would adopt a licensing system similar to El Salvador’s.

However, the partnership suggests an effort to increase transparency and oversight of digital asset service providers.

El Salvador Expanding Role in Crypto Regulation

El Salvador has previously signed a similar agreement with Argentina’s Comisión Nacional de Valores (CNV) in December 2024. The CNAD is the main regulatory body for digital assets in El Salvador and issues Digital Asset Service Provider (DASP) licenses.

Despite its agreement with the International Monetary Fund (IMF), El Salvador has continued to buy Bitcoin. The IMF had set conditions in a $3.5 billion financial deal, limiting government Bitcoin purchases. However, President Nayib Bukele has stated that the country will keep adding to its Bitcoin holdings.

El Salvador now holds 6,111 BTC, worth approximately $507.88 million. The country has in addition acquired 40 BTC in the past 30 days, which is more than its usual rate of one BTC per day. Meanwhile, the government has until July 2025 to comply with the IMF’s restrictions, but recent purchases indicate that it is accelerating acquisitions before the deadline.

Moreover, this move comes amid Microstrategy’s criticism after its stock fell over 49% since its last year November highs amid the Bitcoin price crash.