El Salvador and Paraguay have signed an agreement to strengthen the supervision and regulation of digital asset service providers, such as Bitcoin and other cryptocurrencies.
El Salvador and Paraguay have signed a bilateral agreement to strengthen the supervision and regulation of digital asset service providers (DASPs). This agreement comes within the context of the growing use of cryptocurrencies in Latin America and the need to establish robust regulatory frameworks to prevent potential illicit activities and thus protect investors.
PREPARE YOUR WALLETEl Salvador, which in 2021 became the first country in the world to adopt Bitcoin as legal tender, has led efforts to regulate digital assets. Paraguay, for its part, has adopted a cautious but proactive stance, seeking to balance technological innovation with financial security. The agreement represents an important step toward creating a more transparent and secure ecosystem in the region.
Through collaboration between El Salvador's National Commission for Digital Assets (CNAD) and Paraguay's Secretariat for the Prevention of Money Laundering (SEPRELAD), both countries seek to share information, implement joint strategies, and harmonize regulations.
El Salvador and Paraguay join forces to ensure cryptocurrency security.
The agreement between El Salvador and Paraguay focuses on two key objectives: detecting and eradicating unlicensed operations and strengthening practices against illicit activities to ensure ecosystem security. The rapid expansion of cryptocurrencies in Latin America has created opportunities, but has also increased the risks associated with their potential misuse.
One of the main challenges is the proliferation of cryptocurrency exchange platforms operating without proper authorization. These platforms expose users to potential fraud that can be used for illicit transactions, such as money laundering.
Thanks to this agreement, financial authorities from both countries will be able to share intelligence and technology to identify and shut down these illegal platforms. In addition, more robust protocols will be implemented to detect suspicious patterns in digital asset transactions, adopting an approach that will protect investors and ensure that transactions are conducted within a transparent legal framework.
BUY BITCOINThe collaboration also includes training for professionals in both countries, with the goal of improving the quality of the services offered and reducing the risk of errors or fraud. The exchange of knowledge and resources seeks to create a more secure and efficient system for regulating digital assets.
CNAD and SEPRELAD join forces
In a release It is highlighted that the agreement between the National Commission for Digital Assets (CNAD) of El Salvador and the Secretariat for the Prevention of Money Laundering (SEPRELAD) of Paraguay establishes a joint supervisory framework.
In addition, El Salvador's National Commission for the Advancement of Digital Rights (CNAD) will contribute its expertise in regulating digital assets following the adoption of Bitcoin as legal tender. Paraguay's SEPRELAD (Secretary of Public Administration of the Interior) will contribute its experience in preventing illicit transactions. Overall, this synergy will allow for comprehensive and effective oversight of the crypto sector.
It is worth noting that the agreement includes the harmonization of regulations and the adoption of international standards, aligning with the recommendations of the Financial Action Task Force (FATF), which ensures that the PSADs meet high standards of transparency and security. The cooperation extends to the training of professionals and the investigation of crimes related to digital assets, improving the quality of services and combating illicit activities.
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The cautious stance of the Central Bank of Paraguay
The Central Bank of Paraguay (BCP) maintains a cautious stance on cryptocurrencies, emphasizing that they are not registered or authorized as legal tender in the country. The BCP has warned about the risks associated with these digital assets, including their volatility, potential use in illicit activities, and lack of consumer protection. The main objective of this is to protect the stability of the Paraguayan financial system and ensure that citizens are well informed about the dangers of investing in cryptocurrencies.
Despite its caution, the BCP recognizes the innovative potential of blockchain technology and digital assets. The central bank is exploring the implementation of disruptive technologies to improve the efficiency of the payment system and promote financial inclusion.
LINK CARD AND EARNEl Salvador, a regional leader in crypto regulation
For its part, El Salvador has adopted an ambitious international strategy in the field of cryptocurrency regulation, seeking to position itself as a leader in the field. The adoption of Bitcoin as legal tender in 2021 catapulted the country into the global spotlight and sparked intense debate about the future of digital currencies. The Salvadoran government has seized this opportunity to promote its regulatory approach and collaborate with other countries to develop robust and effective regulatory frameworks, despite the pressure exerted on the country by agencies such as the International Monetary Fund (IMF) over its crypto policy.
The collaboration with Argentina is a prime example of this international strategy. Both countries have exchanged information and experiences on the regulation of digital assets, seeking to harmonize their approaches and promote responsible innovation.
El Salvador has shared its experience in adopting Bitcoin as legal tender, while Argentina has contributed its expertise in combating illicit activities. This bilateral collaboration strengthens both countries' position internationally and contributes to the development of a more secure and transparent crypto ecosystem.
BUY BITCOINTherefore, the agreement between El Salvador and Paraguay to strengthen the supervision and regulation of digital asset service providers represents an important step toward creating a more secure and transparent crypto ecosystem in Latin America. The collaboration between El Salvador's National Commission for the Advancement of Digital Rights (CNAD) and Paraguay's Secretariat of Public Administration (SEPRELAD), along with the cautious stance of the Central Bank of Paraguay and El Salvador's international strategy, lays the foundation for a promising future in the digital asset space.
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
