A Salvadoran issuer is in an unusual position in Latin America: its country does have its own digital asset law, with a specialized regulator and issuer registry. The question is no longer whether tokenizing is legal, but which regime reaches the investors it is targeting. The CNAD opens the domestic market; the EU route through Spain opens the EU market. This guide compares both with verifiable criteria, without selling either route.
What the Digital Asset Issuance Law regulates
The Legislative Assembly approved the Digital Asset Issuance Law in January 2023 and it came into force in February of that year. It regulates public offerings of digital assets, defined as digital representations that can be stored and transferred using distributed ledger technologies, and it creates the National Digital Assets Commission, the CNAD, as the system's authority.
The CNAD authorizes public offerings and administers the regime's registries: issuers, digital asset service providers and certifiers. Certifiers are private evaluators that assess each offering before authorization. The law also created the Bitcoin Funds Management Agency to manage the funds of sovereign issuances.
The political origin of the framework was the bitcoin-backed sovereign bond, the so-called “volcano bond”. The actual scope is broader: it covers public offerings of debt tokens, equity tokens and other categories of digital asset; the domicile and structure requirements for the issuer are set by the law itself and by registrations with the CNAD.
A note on monetary context. El Salvador declared bitcoin legal tender in 2021 and reformed that law in early 2025 to make its acceptance by the private sector voluntary. Digital asset issuance does not depend on that law; they are separate frameworks.
Criterion: if your target investor operates in the Salvadoran or crypto-native ecosystem and your instrument fits as a digital asset, the CNAD offers a real regime, with its own supervisor and registry and in force since 2023.
Scope matters: a digital asset is not a financial instrument
Salvadoran law separates digital assets from securities legislation: what is issued under it falls outside the Securities Market Law and its supervisor. That separation avoids the classification disputes that other jurisdictions carry and is a deliberate design decision, not an oversight.
The practical consequence appears when crossing the border. For a European investor and the entities that serve it, a token that incorporates debt or equity is a financial instrument under MiFID II, whatever it is called in its country of origin (MiFID II). Salvadoran classification does not travel with the token. Distributing in the EU an issuance authorized by the CNAD also requires analyzing the European offering rules (Regulation (EU) 2017/1129).
In the EU route the opposite occurs: a Spanish security token is a security with all its obligations, prospectus or exemption included, and cannot be presented as anything else. The underlying distinction is explained in what is a financial instrument.
Criterion: choose the regime based on the passport you need, not on the token's label. The CNAD enables its own market; the European prospectus, the EU as a whole.
When the EU route makes sense from El Salvador
The EU route relies on a Spanish vehicle of the group that issues the token as a financial instrument. The ownership registry is handled by an ERIR, the “digital notary” of the tokenized securities registry, required by Ley 6/2023 and developed in RD 814/2023 (Ley 6/2023; RD 814/2023). The first ERIR authorized by the CNMV was URSUS-3 Capital, A.V., in November 2024.
With a prospectus approved by the CNMV, the offering is passported across the entire EU (Regulation (EU) 2017/1129, arts. 24-25). Below 12 million euros over 12 months, the prospectus exemption in force since June 2026 applies, with each Member State having the option to lower it to 5 million (Regulation (EU) 2024/2809). The full mechanism is in the guide to the European prospectus passport and in what the Listing Act is.
It fits Salvadoran issuers that bill European clients and want investors in the same jurisdiction as their contracts. It also fits those who have already issued under the CNAD and want a second issuance aimed at European institutional investors, who operate with financial instruments from their own framework. The trade-off is real: the European route requires more documentation the larger the offering, and a CNMV prospectus is a project in itself.
Criterion: the European route pays off when the target investor is in Europe or requires European law. To raise capital from the local or crypto-native ecosystem, the CNAD already fulfills that function without additional structure.
CNAD and the European route, head to head
| Criterion | CNAD regime (El Salvador) | European route (Spain) |
|---|---|---|
| Legal nature of the token | Digital asset, outside securities legislation | Financial instrument (MiFID II) |
| Legal basis | Digital Asset Issuance Law (2023) | Ley 6/2023, RD 814/2023, Regulation (EU) 2017/1129 |
| Supervisor | CNAD | CNMV |
| Offering assessment | Private certifiers and CNAD authorization | Prospectus approved by the CNMV or exemption up to 12 M€/12 months |
| Ownership registry | Registers administered by the CNAD | ERIR authorized by the CNMV |
| Investors reached | Those who accept the Salvadoran regime; no passporting to other markets | Entire EU, with prospectus passport or exemptions |
Process from El Salvador, step by step
- Define the instrument and target investor. If the capital is in the local or crypto-native ecosystem, evaluate the CNAD first. If it is in Europe, continue with the Spanish route.
- Design the structure. The Spanish vehicle issues; the Salvadoran company is linked as debtor, guarantor or holder of the asset. The tax treatment in both countries is reviewed by advisors in each jurisdiction.
- Incorporate the Spanish vehicle. Incorporation is managed largely remotely, with notarized powers of attorney apostilled from El Salvador. Timelines depend on the notary, registry and obtaining the NIF.
- Prepare the offering documentation. Prospectus before the CNMV or exemption documentation depending on amount, with the Salvadoran business information translated into the European disclosure standard.
- Contract the ERIR and execute. Registration of the issuance, onboarding of investors with KYC and distribution of the tokens against the registry of holdings.
HokenFi is the technology platform that supports the issuance and lifecycle of the token. It is not an entity authorized by the CNMV nor is it registered with the CNAD; the regulated path is covered by the ERIR and the advisors of each transaction. The complete fit for issuers in the region is in tokenization for issuers in Latin America.
Are you comparing the CNAD and the European route for your issuance? Take the issuance diagnostic (2 min) or request a proposal. If you prefer to start by reading, download the 2026 guide.
This content is informative and educational. It does not constitute legal, tax, or investment advice. Check the current version of each regulation in the BOE and on EUR-Lex.
HokenFi is a software and infrastructure provider; it does not provide regulated services (CASP, ESI, EAF, or ERIR). This article is informative and does not constitute financial or legal advice.
Frequently asked questions
What is the CNAD and what does it authorize in El Salvador?
The National Digital Assets Commission (CNAD) is the regulator created by the Digital Asset Issuance Law of 2023. It authorizes public offerings of digital assets and administers the registers of issuers, digital asset service providers and certifiers. It is a supervisor specific to the digital asset regime, separate from the traditional Salvadoran securities regulator.
Is a digital asset issued under Salvadoran law a transferable security?
In El Salvador, no: the law expressly separates digital assets from securities legislation and from the Securities Market Law. That classification does not travel outside the country. In the EU, a token that incorporates debt or equity is treated as a financial instrument under MiFID II, with its prospectus or exemption obligations, regardless of the local label.
When is the European route suitable for a Salvadoran issuer?
When your target investor is in Europe or requires European law. A Spanish vehicle issues the token as a financial instrument, an ERIR keeps the register of ownership, and the prospectus approved by the CNMV is passported throughout the EU. Below 12 million euros over 12 months, the prospectus exemption in force since June 2026 applies.
