EL SALVADOR Trends and Developments Contributed by: Héctor Torres, Torres Legal
service provider framework gives legal teeth to those promises. Infrastructure that promoted compliance The 2024 privacy and cyber statutes raise the floor on vendor management, incident response and cross- border transfers. That matters to institutional diligence committees who want to see that identity, payments and custody vendors inherit governance obligations by design. Regulatory access and scale Salvadoran regulators – ie, the competition, central bank and financial system regulators – are accessible. There is no horizontal FDI screening regime that would second-guess a well-structured issuance purely on origin of capital; scrutiny is sectoral (financial, tel- ecoms, energy) or competition-driven. For tokenisa- tion, the gating issues are disclosure quality, custody, governance and compliance architecture, not arbitrary quotas. Use cases that work now Tokenisation is a tool, not a thesis. The structures that already pencil out for El Salvador in 2025 have some- thing in common: clear cash flows, auditable perfor- mance data and a natural investor base. Revenue share tokens for mid-market project finance Infrastructure sub-segments – distributed solar, cold- chain logistics, data-centre upgrades and industrial water recycling – have predictable revenue once oper- ational. Tokenised revenue shares can allocate a por- tion of gross receipts to token holders until predefined multiples are met, with upside participation if EBITDA thresholds are exceeded. Smart contract covenants can enforce: • priority waterfalls, payment dates and cure periods; • information rights (monthly data feeds to token holder dashboards); and • step-in rights for an independent servicer in case of underperformance (in relation to KPIs). LEAD’s issuer obligations make those covenants more than code; they are disclosures backstopped by administrative enforcement.
Tokenised receivables and working capital notes El Salvador’s remittance-driven economy and growing merchant-acquiring networks create granular, diversi- fied payment streams. Tokenising purchased receiva- bles (with overcollateralisation, triggers and dynamic reserves) can reduce the cost of capital for reputable originators. The benefits are: • real-time reporting of collections through API feeds; • automatic sweeps to token-holder SPVs; and • covenant triggers coded to delinquency and dilu- tion metrics. The privacy/cyber regime forces originators to docu- ment lawful bases and vendor controls before launch- ing, making diligence faster and less anecdotal. Asset-backed notes tied to real estate or equipment Tokenised secured notes – properly perfected under Salvadoran law – can serve industrial equipment leas- ing and multi-tenant logistics. Tokenisation’s incre- mental value is not in the lien itself but in post-issu- ance transparency: token holders see collateral status updates, insurance confirmations and cash sweeps without waiting for quarterly PDFs. Capital raising for licensed financial institutions Banks and non-banks exploring minority sell-downs or product expansions can use tokenised subordinat- ed notes or participation interests to reach regional private wealth and family offices who prefer digital custody and secondary liquidity windows. Where the issuer is regulated, Central Reserve Bank ( Banco Central de Reserva de El Salvador BCR) and Superin- tendency of the Financial System ( Superintendencia del Sistema Financiero SSF) engagement focuses on prudential and consumer protection considerations; the token is a technology choice layered on top of familiar prudential logic. Designing issuances that institutional investors can underwrite A credible Salvadoran tokenisation programme aligns legal, technical and commercial tracks from day one.
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