El Salvador and Paraguay have formalized a partnership to enhance cryptocurrency regulation, with the goal of improving oversight and reducing financial crimes linked to digital assets. The agreement, signed on March 7, 2025, establishes a framework for both countries to strengthen cooperation against money laundering, terrorism financing, and other illicit activities involving digital currencies.
Key Details of the Agreement
The Memorandum of Understanding (MOU) was signed by Paraguay’s Secretariat for the Prevention of Money Laundering (SEPRELAD) and El Salvador’s National Commission of Digital Assets (CNAD). The pact is designed to increase monitoring of digital asset service providers and curb unauthorized crypto operations across both nations.
In a statement, CNAD President Juan Carlos Reyes García emphasized the significance of this collaboration, calling it a step toward ensuring financial integrity in the evolving digital economy. He noted that cross-border cooperation would foster innovation while protecting against illegal financial activities.
Both SEPRELAD and CNAD will also share information to enhance regulatory frameworks and ensure better enforcement of laws related to digital assets.
Paraguay’s Stance on Crypto and Regulatory Concerns
Paraguay has taken a cautious approach toward cryptocurrency oversight. The Central Bank of Paraguay recently warned citizens against engaging with unregulated crypto entities, stating that no digital assets are officially recognized by the central bank or the country’s securities supervision agency, the Superintendencia de Valores. The bank’s warning underscores the importance of regulating the crypto space to avoid risks associated with unlicensed operations.
The regulatory pact with El Salvador aims to address these concerns and increase transparency in the cryptocurrency sector. While the details of Paraguay’s potential adoption of a licensing system similar to El Salvador’s remain unclear, this partnership signals a significant move toward tightening oversight.
El Salvador’s Continued Bitcoin Strategy
In addition to strengthening regulatory measures, El Salvador remains committed to its Bitcoin strategy. Despite an agreement with the International Monetary Fund (IMF) that limits the country’s Bitcoin purchases, President Nayib Bukele has affirmed that the government will continue acquiring Bitcoin.
As of now, El Salvador holds 6,111 BTC, valued at approximately $507.88 million, and has purchased 40 additional BTC in the past month, surpassing its usual pace of acquisition. The country is accelerating its Bitcoin purchases ahead of the IMF’s July 2025 compliance deadline, signaling its intent to expand its digital asset holdings.
This strategy comes amid growing scrutiny of Bitcoin-related investments, particularly following a significant decline in the stock value of MicroStrategy, a major Bitcoin holder, which has faced a 49% drop since its peak in November 2024.
El Salvador’s proactive stance, alongside the newly signed regulatory agreement, highlights its commitment to both crypto innovation and financial stability within the global digital economy.
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