Specialised Digital Asset Supervision

The main regulator for blockchain and crypto-asset businesses in El Salvador is CNAD, which is the specialised authority created under the Digital Assets Issuance Law and is responsible for the registration, supervision and monitoring of digital asset issuers, public and private offerings, DASPs, certifiers and other regulated participants within the LEAD framework.

CNAD’s approach has been both supervisory and developmental. It reviews applications, authorises regulated participants, monitors ongoing compliance and engages with market participants in connection with new products, relevant platform changes, stablecoin no-objection requests, new authorised activities and changes to previously approved issuances.

Financial System Regulators

The SSF remains relevant where blockchain or crypto-asset activities intersect with traditional financial institutions, including banks, insurers, pension funds, securities market participants, investment funds and other supervised entities. The SSF’s mandate is to preserve financial system stability, efficiency, transparency, safety and soundness, in line with international best practices.

The Central Bank of Reserve of El Salvador (BCR) is relevant for monetary, payment system and financial infrastructure matters. Its role is particularly important where digital asset activities connect with payment systems, settlement rails, liquidity, banking infrastructure or Bitcoin-related payment implementation. The BCR also issues and approves technical norms applicable to the financial system, including rules connected to payment systems and financial system stability.

Tax, AML and Criminal Enforcement Authorities

The Ministry of Finance is relevant for the tax treatment of digital assets, including the application of exemptions under the LEAD, the Bitcoin Law and the general income tax regime. The UIF, within the Attorney General’s Office, is the key authority for AML/CFT reporting, suspicious transaction analysis and guidance to obliged entities. The UIF has issued guidance for virtual asset service providers and maintains training, registration and reporting tools for AML/CFT compliance.

The FGR is relevant where crypto-asset activity involves fraud, money laundering, terrorist financing, market misconduct or other criminal offences.

International AML/CFT Alignment

El Salvador’s strongest area of international alignment is AML/CFT. The country is a member of the Caribbean Financial Action Task Force (CFATF), and its AML/CFT framework is assessed through this FATF-style regional body.

In the digital asset sector, El Salvador has sought to align with FATF standards on virtual assets and virtual asset service providers, including registration, supervision, customer due diligence, suspicious transaction reporting, risk-based controls and Travel Rule-related expectations. The FATF mutual evaluation materials note that El Salvador has established a supervisory authority for the DASP sector, has created a DASP registry and has been providing feedback to the sector.

Securities and Financial Market Standards

El Salvador’s alignment with IOSCO is mainly relevant through the SSF and the traditional securities market, rather than directly through CNAD. The SSF is listed as an ordinary member of IOSCO and participates in IOSCO’s Inter-American Regional Committee.

However, El Salvador’s digital asset framework is not a copy of IOSCO, MiCA or other international models. The LEAD is a bespoke regime designed to regulate issuers, offerings, DASPs and certifiers under a specialised domestic framework. It incorporates international principles such as disclosure, supervision, AML/CFT controls, investor protection and market integrity, while preserving distinctive Salvadoran features, including Bitcoin’s separate legal status and the country’s tax incentive architecture.

Issuer-Based Classification

El Salvador classifies crypto-assets mainly through the Digital Assets Issuance Law. The LEAD focuses on digital assets issued, offered, transferred or serviced within a regulated framework. These assets may represent debt rights, ownership rights, revenue rights or hybrid structures, depending on the rights granted to holders.

Bitcoin is treated separately as legal tender under the Bitcoin Law. Other native crypto-assets without an identifiable issuer are not automatically captured by the LEAD, unless a regulated activity, offering, platform or service provider creates a Salvadoran regulatory nexus.

The LEAD also expressly excludes certain assets from its scope, including utility tokens that can only be exchanged for goods or services of the issuer or a limited group of providers, non-transferable or non-tradable assets, assets used only within closed or limited systems, and assets already regulated under another Salvadoran law. These exclusions are relevant when determining whether a product falls inside or outside the LEAD framework.

Specific Regulatory Framework

El Salvador has a dedicated framework for digital assets. The LEAD regulates digital asset issuances, public and private offerings, DASPs, certifiers and other participants in the regulated ecosystem. CNAD is the specialised authority responsible for authorisation, supervision and enforcement.

Regulated Activities

The main regulated activities include public offerings, private offerings, operation as a DASP, digital asset certification, custody, exchange, transfer, placement, structuring, administration and advisory services related to digital assets.

Restricted Activities and Market Segmentation

The LEAD does not contain a broad catalogue of prohibited crypto products; instead, it regulates through authorisation, registration, disclosure and supervision. Unauthorised public offerings, fraud, market manipulation, money laundering, terrorist financing, misleading disclosures or providing regulated services without registration may be sanctioned.

There is no complete retail/professional investor regime equivalent to MiFID II. However, public offerings are subject to higher disclosure standards, while private offerings are generally directed to qualified or institutional investors.

Expected Developments

Over the next 12 months, regulatory development is expected mainly through CNAD secondary rules and supervisory practice, particularly on stablecoins, custody, cross-border DASP activity, reporting, business continuity, AML/CFT, Travel Rule implementation and DeFi-related activities.

Substance Over Legal Form

Using a legal wrapper, such as an investment fund, PAIF or SICAF, does not automatically change the regulatory analysis under the LEAD. The key question is the substance of the activity: whether the vehicle issues digital assets, tokenises interests, offers digital asset exposure, provides digital asset services or creates a Salvadoran regulatory nexus.

A fund structure cannot be used to avoid CNAD registration where the underlying activity is, in substance, a regulated digital asset issuance or DASP activity.

Investment Funds, PAIFs and SICAFs

El Salvador regulates collective investment vehicles under the Investment Funds Law and, more recently, under the Law on Private Alternative Investment Funds. The local funds market has historically been more limited than in larger fund jurisdictions, but the PAIF regime introduced a more flexible framework for sophisticated investors.

PAIFs may be structured as subordinated funds managed by an authorised administrator, or as autonomous funds through a Sociedad de Inversión de Capital Fijo (SICAF). The PAIF Law allows investment in a broad range of assets, including non-traditional or alternative assets, which may encompass digital assets, provided they are consistent with the authorised activities, investment policies, valuation methodology and risk management framework of the vehicle.

Prudential and Conduct-of-Business Considerations

For entities regulated by the SSF, including banks, insurers, pension funds, securities market participants and investment fund managers, crypto-asset exposure must be analysed under the general prudential framework. The SSF has not yet issued a specific prudential regime for crypto-asset exposure, so regulated entities must assess such exposure through existing rules on asset classification, provisioning, concentration limits, operational risk, cybersecurity, outsourcing, custody, valuation and internal controls.

From a conduct-of-business perspective, regulated firms must also consider investor suitability, disclosure, conflicts of interest, fair treatment of clients, risk warnings and governance. In the PAIF context, the regime is limited to sophisticated investors and is subject to proportional supervision, with the SSF acting as the main supervisory authority and the BCR issuing applicable technical norms.

Parallel Regulatory Analysis

Legal wrappers may improve structuring, asset segregation, governance and investor protection, but they do not eliminate regulatory analysis. Firms considering fund structures with digital asset exposure in El Salvador should conduct a parallel review under both the LEAD/CNAD framework and the applicable SSF and PAIF/SICAF regime before launching any product or service.

El Salvador has one of the most developed crypto-asset issuance frameworks in Latin America. The Digital Assets Issuance Law provides a legal path for token launches, including debt tokens, equity tokens, revenue tokens, hybrid structures and RWA tokenisations.

The legal concept is not necessarily an ICO or TGE, but a public or private offering of digital assets. To launch from El Salvador, an issuer would generally need to:

• incorporate or register a Salvadoran entity;
• structure the token rights;
• prepare the issuance documentation;
• appoint a registered certifier;
• file the offering with CNAD; and
• obtain registration or approval before marketing or selling the token.

If the project also involves custody, exchange, transfer, placement, administration or advisory services, a registered DASP may also be required.

Disclosure and RID Requirements

Regulated offerings require formal disclosure documentation. The key document is the Relevant Information Document (RID), which functions as the equivalent of a prospectus or whitepaper within the CNAD framework.

For public offerings, the RID must describe the issuer, token rights, use of proceeds, risk factors, financial information, technology, smart contract mechanics, custody arrangements, AML/CFT controls, fees, conflicts of interest and the legal link to any underlying asset or cash flow.

Private offerings are subject to lighter requirements, but remain regulated and must comply with minimum disclosure, registration and investor qualification standards.

Foreign issuers selling into El Salvador should assess whether their marketing, platform access or investor base creates a Salvadoran nexus requiring CNAD registration.

Market Abuse and Insider Trading Framework

El Salvador does not yet have a comprehensive digital asset market abuse regime equivalent to the EU Market Abuse Regulation. However, the LEAD and the CNAD framework contain investor protection and market integrity principles that allow the regulator to address abusive conduct within the regulated digital asset ecosystem.

In addition, CNAD regulations for issuers and public or private offerings define privileged information as any non-public information relating directly or indirectly to one or more digital asset issuers or digital assets which, if made public, could materially influence the price of such digital assets.

Prohibited or sanctionable conduct may include:

• misleading disclosures;
• fraudulent promotion;
• market manipulation;
• unauthorised public offerings;
• misuse of investor funds;
• false statements in offering documents; and
• conduct affecting the transparency or integrity of a regulated digital asset issuance or DASP activity.

Where the conduct is connected to money laundering, terrorist financing, fraud or suspicious transactions, the matter may also fall within the scope of the UIF and the FGR, in addition to CNAD’s administrative powers.

Difference From Traditional Securities Regulation

The traditional securities market is subject to a more developed framework under the Securities Market Law and SSF supervision, including detailed rules on issuers, listed securities, disclosure duties and market conduct.

By contrast, the digital asset framework is newer and more principles-based. Although CNAD regulations already recognise the concept of privileged information in the context of digital asset issuers and offerings, specific market abuse concepts such as front-running, wash trading, spoofing, insider dealing and market surveillance are not yet developed in the same level of detail as in mature securities regimes.

In practice, issuers, PSADs and trading platforms should adopt internal market conduct policies, conflicts of interest controls, restricted-list procedures, disclosure protocols and monitoring systems to mitigate these risks.

Enforcement Consequences and Supervisory Approach

CNAD has authority to supervise regulated participants and impose administrative consequences for non-compliance, including warnings, fines, suspension or cancellation of registrations, depending on the nature and severity of the breach. Operating as an issuer, DASP, certifier or other regulated participant without CNAD authorisation is illegal and may result in penalties under the Digital Assets Issuance Law.

At the time of writing, no major public enforcement actions resulting in the revocation or suspension of a LEAD-regulated entity have been reported. The regulator’s approach has generally been facilitative but rigorous: it seeks to develop the market while requiring supervised entities to comply with registration, disclosure, AML/CFT, operational and investor protection standards.

Cross-Border Breaches

For cross-border activity, the key issue is whether the foreign operator is actively targeting El Salvador, marketing to Salvadoran investors or providing regulated services with a Salvadoran nexus. If so, CNAD may require registration or take action against unauthorised activity directed into the jurisdiction.

Where cross-border breaches involve fraud, money laundering, terrorist financing or suspicious transactions, the matter may also involve the UIF and the FGR, together with international co-operation channels such as FIU-to-FIU exchanges or mutual legal assistance mechanisms.

Expected Regulatory Direction

The regulatory attitude is expected to remain broadly pro-innovation over the next 12 months. However, supervision is likely to become more structured as the number of authorised issuers, DASPs and tokenised offerings grows.

Accordingly, while the regulator is not expected to shift toward an aggressive enforcement posture, market participants should expect closer monitoring, stronger documentation standards and more practical scrutiny of AML/CFT, governance, custody, reporting, business continuity and user protection controls.

Triggers for CNAD Registration

A blockchain business does not require a licence in El Salvador merely because it uses blockchain technology. Registration is required when the activity falls within the regulated perimeter of the Digital Assets Issuance Law and CNAD regulations. The main triggers are:

• conducting a public or private offering of digital assets;
• acting as an issuer of digital assets;
• operating as a DASP;
• acting as a certifier; or
• providing regulated services, such as custody, exchange, transfer, placement, structuring, administration or advisory services related to digital assets.

The CNAD registration process for DASPs is structured in stages, including pre-registration, regulatory evaluation and definitive registration, with requirements relating to corporate structure, governance, compliance, technology, cybersecurity, AML/CFT controls, risk management and operational capacity.

Territorial Nexus

The licensing requirement is not limited to companies incorporated in El Salvador. A foreign entity may fall within the CNAD perimeter if it actively promotes, markets or provides digital asset services in El Salvador, or if its offering is directed at Salvadoran investors.

Board control from El Salvador is not, by itself, an express licensing trigger. However, local management, decision-making, personnel, commercial activity, Salvadoran clients, local infrastructure or use of a Salvadoran platform may be relevant in assessing whether there is a sufficient Salvadoran nexus.

Grandfathering and Transition

The LEAD and DASP Regulation are now in force, and there is no broad ongoing grandfathering regime allowing firms to carry out regulated digital asset activities indefinitely without registration. Businesses that were already operating before the current framework were expected to regularise their status with CNAD where their activities fell within the LEAD.

In practice, firms should not rely on prior activity, offshore status or a technology-only characterisation to avoid registration. A business intending to operate as a DASP, issuer or certifier should assess its activity against the LEAD and the DASP Regulation before launching or marketing services in or from El Salvador.

The process for obtaining authorisation as a DASP is managed by CNAD and generally involves pre-registration, regulatory review and definitive registration. The applicant must submit information on its entity, proposed services, operating model, governance, compliance framework, technology infrastructure and supporting documentation. CNAD may request additional information before issuing its decision.

Applicants must demonstrate sufficient corporate substance and operational capacity, including a Salvadoran entity or registered presence, clear ownership and governance structure, qualified management, internal policies and the ability to respond to CNAD supervision from El Salvador.

A DASP applicant must include a principal Compliance Officer and an alternate Compliance Officer responsible for AML/CFT and regulatory compliance, as well as a Chief Information Security Officer (CISO) responsible for cybersecurity, information security and technology risk management.

The applicant must also evidence financial, operational and technical capacity appropriate to its authorised activities, including the applicable minimum equity requirement under the DASP Regulation, AML/CFT controls, cybersecurity standards, business continuity plans, risk management procedures, custody or segregation arrangements, user protection mechanisms and internal controls.

In practice, CNAD reviews whether the applicant can operate safely, continuously and in compliance with the regulatory framework.

Any acquisition or transaction resulting in a change of control of a registered DASP, issuer or other CNAD-regulated participant must be reviewed from a regulatory reporting perspective. CNAD must be informed of any relevant change in ownership, ultimate beneficial ownership, control, governance, board composition, senior management or operating structure.

Under the DASP Regulation, relevant changes must be reported to CNAD within five business days following the materialisation of the change. However, the change is not subject to prior CNAD approval as a condition for its validity, unless another specific regulatory requirement applies. This obligation may apply not only to direct share transfers, but also to indirect acquisitions at holding company level, mergers, restructurings, voting arrangements or other transactions that materially affect control of the regulated entity.

In practice, the acquiring party should be prepared to provide corporate, ownership, AML/CFT, source-of-funds, fit-and-proper and financial information if requested by CNAD, so the regulator can assess whether the entity continues to meet its authorisation conditions. Transaction documents should therefore include regulatory notice obligations, co-operation covenants and information-sharing provisions. A buyer should not assume that acquiring a licensed entity avoids regulatory scrutiny, even if the change itself is not subject to prior approval.

A CNAD licence or registration obtained in El Salvador does not provide formal passporting rights into other jurisdictions. There are currently no mutual recognition or equivalence arrangements under which a CNAD-authorised DASP, issuer or certifier may automatically operate in another country without complying with the local regulatory requirements of that jurisdiction.

However, CNAD authorisation may provide practical value when approaching foreign regulators, banks, counterparties or institutional clients, as it evidences that the entity is subject to a specialised digital asset framework, AML/CFT obligations, governance standards and regulatory supervision in El Salvador.

Any firm seeking to operate outside El Salvador must therefore conduct a separate regulatory analysis in each target jurisdiction and, where required, obtain the relevant local licence, registration or legal opinion. The Salvadoran licence may support the application process, but it does not replace local authorisation.

Conversely, a foreign digital asset licence does not automatically allow a firm to operate in El Salvador. If the activity has a Salvadoran nexus or is directed at Salvadoran clients, separate CNAD registration may be required.

Cross-Border Marketing into El Salvador

Cross-border marketing of blockchain or digital asset services into El Salvador may trigger regulatory requirements where the activity falls within the scope of the LEAD or CNAD regulations. A foreign firm may be required to register with or obtain approval from CNAD if it:

• directs a public or private offering of digital assets to Salvadoran investors;
• actively markets digital asset services in El Salvador; or
• provides regulated PSAD services with a sufficient Salvadoran nexus.

Public offerings are subject to the disclosure requirements described in 2.4Token Issuance, including registration of the relevant offering documentation with CNAD prior to marketing.

Reverse Solicitation and Exemptions

The LEAD does not contain an express reverse solicitation exemption. A purely passive relationship initiated by a Salvadoran client, without prior marketing, solicitation or targeting by the foreign firm, may reduce regulatory risk, but it should be analysed carefully.

Foreign firms should not rely on reverse solicitation where there has been advertising, local promotion, use of intermediaries, targeted online campaigns, roadshows, local events or platform features aimed at Salvadoran users.

Advertising and Marketing Standards

El Salvador does not have a dedicated advertising authority for crypto-assets; general consumer protection, commercial advertising, anti-fraud and CNAD disclosure principles apply. Marketing materials for digital assets should therefore be clear, fair and not misleading, and should include appropriate risk disclosures where the product is offered to Salvadoran investors.

In practice, the key test is whether the marketing creates a Salvadoran nexus sufficient to bring the activity within CNAD’s regulatory perimeter. Foreign firms should assess both the regulatory status of the product and the manner of solicitation before approaching Salvadoran clients.

White-label arrangements may be used in El Salvador, but they do not operate as a general exemption from CNAD registration. A registered DASP may provide infrastructure, technology, operational or regulated services to third parties under a white-label model, provided the arrangement is properly documented and the licensed entity remains responsible for the regulated activities carried out under its licence.

However, the licence of an existing DASP cannot be used as a blanket authorisation for all external firms operating through that platform. Each entity participating in the structure must be analysed individually, and may need to undergo its own CNAD registration or approval process where its role involves regulated digital asset services, client onboarding, marketing, custody, exchange, transfer, placement, administration or advisory activities.

The registered DASP remains responsible before CNAD for compliance with its regulatory obligations, regardless of any internal contractual allocation of responsibilities with the white-label partner. This includes AML/CFT controls, user protection, operational resilience, reporting, cybersecurity and other obligations applicable to its authorised activities.

In practice, CNAD would likely review the substance of the arrangement rather than its commercial label. The key issues are which entity faces the client, who performs the regulated activity, who controls the user relationship, who handles funds or assets, and who assumes compliance, AML/CFT, technology and operational responsibilities.

Accordingly, white-label models are possible, but they must be structured carefully. They should not be treated as a way for unlicensed entities to operate generally in El Salvador under another firm’s licence.

DeFi is not expressly prohibited in El Salvador. A purely decentralised product with no identifiable issuer, operator, intermediary, service provider or controlling entity would generally fall outside the direct regulatory scope of the LEAD, as the law mainly regulates digital asset issuances and the provision of digital asset services.

However, if there is an entity or person controlling the protocol, promoting the product, managing user access, receiving fees, custodying assets, operating an interface or otherwise acting as an intermediary, the analysis changes. In that case, the activity may fall within CNAD’s regulatory perimeter and require registration as a DASP or compliance with the applicable digital asset issuance rules.

As CNAD has not yet issued specific guidance on DeFi, this analysis is based on the current scope of the LEAD and may evolve as the regulator develops its supervisory approach to decentralised protocols. CNAD is rigorous in assessing substance over form, so a project will not be treated as unregulated simply because it uses DeFi terminology if, in practice, there is a centralised operator or service provider behind the activity.

Use of DeFi by CeFi Firms

CeFi firms registered in El Salvador are not generally prohibited from using DeFi protocols in connection with their products or services, but they must ensure that doing so does not conflict with their CNAD authorisation or regulatory obligations. The main concerns fall into three categories.

• First, compliance and AML/CFT: KYC, sanctions screening, Travel Rule compliance where applicable, transaction monitoring and suspicious activity controls.
• Second, technology and operational risk: smart contract risk, cybersecurity, custody, asset segregation, business continuity, counterparty exposure and the ability to understand and monitor the protocol.
• Third, user protection: clear disclosures, risk warnings, valuation, liquidity, complaints handling and the ability to explain the DeFi exposure to users and the regulator.

There is no settled market practice or specific legal regime in El Salvador for DeFi structures, including decentralised autonomous organisations (DAOs). A DAO is not currently recognised as a separate legal entity under Salvadoran law, so questions of legal personality, capacity, governance, representation and liability remain uncertain.

In the absence of legal recognition, DAO participants with a Salvadoran nexus may face personal liability under general civil or commercial law, as there is no statutory limited liability shield equivalent to that available through a corporation or other recognised legal entity.

For DeFi projects with a Salvadoran connection, the most practical structure is usually a Salvadoran company, or a foreign foundation/company with a Salvadoran operating entity, to perform off-chain functions such as development, governance support, treasury management, marketing, regulatory engagement or user support.

However, if that entity controls the protocol, manages user access, receives fees, provides custody, exchange, transfer, placement or advisory services, or otherwise acts as an intermediary, the structure may fall within CNAD’s regulatory perimeter and require registration as a DASP or compliance with digital asset issuance rules.

Set-Up, Substance and Capital Requirements

A purely decentralised protocol with no identifiable issuer, operator or service provider does not have a specific DeFi set-up or capital requirement in El Salvador. However, as CNAD has not yet issued specific guidance on DeFi, this analysis is based on the current scope of the LEAD and may evolve as the regulator develops its supervisory approach to decentralised protocols.

Where a DeFi structure uses a Salvadoran entity or performs regulated activities, ordinary corporate, tax, AML/CFT, governance and regulatory requirements will apply. If DASP registration is required, the applicant must satisfy CNAD requirements on corporate substance, minimum equity, AML/CFT controls, compliance officers, CISO, cybersecurity, risk management, business continuity and user protection.

In practice, DeFi projects should analyse whether they are truly decentralised or whether a legal entity, promoter, interface operator or service provider creates a regulated nexus in El Salvador.

At the time of writing, there is no significant public judicial or CNAD precedent in El Salvador specifically addressing liability for harm caused by a DeFi protocol, nor any major reported enforcement action focused exclusively on DeFi.

In the absence of DeFi-specific rules, liability would likely be assessed under general civil, commercial, contractual and criminal law. If there is an identifiable operator, promoter, interface provider, treasury manager or controlling entity, courts and regulators would likely look at the substance of that role rather than the project’s description as “decentralised”.

Where the relevant conduct involves regulated services such as custody, exchange, transfer, placement, administration or advisory activities, CNAD may treat the activity as falling within the DASP perimeter. If the harm involves fraud, money laundering, terrorist financing, cybercrime or suspicious transactions, the UIF and the FGR may also become relevant.

For truly decentralised protocols with no identifiable legal person or operator, enforcement remains more difficult, particularly in identifying a defendant, proving control and enforcing remedies.

In the absence of DeFi-specific regulation, best practice for projects with a Salvadoran nexus includes clear governance documentation, user disclosures, contractual risk allocation, smart contract audits, incident response procedures and a clear description of any role performed by identifiable legal entities or contributors.

Payments in crypto-assets are permitted in El Salvador. Bitcoin payments are allowed, but following the 2025 amendments to the Bitcoin Law, acceptance by private parties is voluntary rather than mandatory. In practice, parties may agree to use Bitcoin as a means of payment, but no merchant is generally required to accept it.

Payments in other digital assets, including stablecoins, are not prohibited, but they are not legal tender and depend on contractual agreement between the parties. Where a business merely accepts a digital asset as consideration for goods or services, the analysis is generally contractual, and the tax treatment will depend on whether the transaction falls within the LEAD’s exemption regime or the general income and VAT framework.

However, if the activity involves providing payment, transfer, exchange, custody or settlement services for third parties, it may fall within the DASP perimeter and require CNAD registration. In those cases, the provider must comply with applicable AML/CFT, KYC, Travel Rule, cybersecurity, user protection and reporting obligations.

The BCR remains relevant where crypto-asset payment activity connects with payment systems, banking infrastructure or settlement rails. Accordingly, crypto payments are permitted, but intermediated payment services involving digital assets must be analysed under the LEAD, CNAD regulations and, where applicable, the general payment system framework.

Tokenised RWAs are generally regulated through a dual analysis in El Salvador. The token itself may fall under the LEAD and CNAD framework, while the underlying asset remains subject to the ordinary legal regime applicable to that asset.

In practical terms, tokenisation does not eliminate or replace the legal requirements that apply to the non-blockchain equivalent. For example, tokenised real estate must still respect notarial, property registry and ownership transfer rules; tokenised receivables must still be validly assigned or pledged; and tokenised corporate or fund interests may trigger corporate, securities, fund or SSF-related analysis, as discussed in 2.3 Regulated Firms and Legal Wrappers.

The LEAD provides the regulatory framework for the issuance, offering and trading of the digital asset. The relevant offering documentation must clearly define the issuer, the token rights, the underlying asset, the legal mechanism connecting the token holder to that asset or cash flow, custody or collateral arrangements, risk factors and enforcement mechanics.

Compared with traditional non-tokenised structures, RWA tokenisations are subject to an additional layer of CNAD registration, disclosure and supervision when offered publicly or privately as digital assets. However, they may also benefit from the advantages of the Salvadoran digital asset regime, including greater flexibility for cross-border distribution, blockchain-based transferability, automated settlement and potential tax benefits under the LEAD where the structure falls within the regulated ecosystem.

Accordingly, tokenisation is best understood as a regulated digital wrapper over an underlying legal asset. The key issue is ensuring that the on-chain token accurately reflects enforceable off-chain rights.