El Salvador’s Decree No. 643 of 2023: A New Chapter in Financial Compliance Regulations for Digital Assets
In the rapidly evolving world of finance, countries are adapting to the rise of cryptocurrencies and digital assets, redefining the global financial landscape. The Republic of El Salvador, a founding member of the Central American Monetary Council known for its financial regulatory matters, is making waves in this arena.
El Salvador made headlines by adopting Bitcoin as legal tender, but its regulatory efforts go beyond this groundbreaking move. Decree No. 643 of 2023 is an essential step in El Salvador’s financial compliance regulations, focusing on Digital Asset Service Providers (DASPs).
El Salvador’s Reach in the Digital Asset Industry
El Salvador’s progressive approach to the digital asset industry addresses the necessity of a robust regulatory framework to ensure legal certainty and foster business growth.
- Adoption of Bitcoin as legal tender
- Regulatory efforts focusing on Digital Asset Service Providers (DASPs)
Decree No. 643: Essential Steps for Regulatory Compliance
The decree aims to:
- Enhance investor protection
- Combat financial crimes
- Promote market integrity
Requirements for Digital Asset Service Providers
The decree outlines stringent requirements for DASPs:
- Licensing
- Registration
- Capital adequacy
- Client identification
- Due diligence
- Reporting obligations
- Cybersecurity standards
Establishing a Regulatory Body
The Digital Asset Regulatory Authority (DARA) is spearheaded by El Salvador’s Central Bank:
- Supervise, license, and enforce compliance of DASPs
- Oversee the implementation of the decree
- Ensure digital asset sector adheres to regulatory standards
international best practices
Attracting International Attention
El Salvador’s regulatory efforts have attracted international attention and admiration:
- Setting an example
- Paving the way for a thriving, sustainable digital asset economy
- Responsible and compliant adoption of cryptocurrencies and digital assets
This article was written by eNor Securities and published on August 8, 2023.