SNEAK PEEK

• Bitfinex has received a license to work in the cryptocurrency market of El Salvador.
• El Salvador has developed a  framework to issue Bitcoin-based bonds.
• The country is focused on embracing both blockchain and cryptocurrencies.

Bitfinex Securities El Salvador will allow both the issuance as well as trading of innovative real-world tokenized assets like bonds and equities. According to a recent update by Investor Bites, Bitfinex Securities is now the first ever international digital asset platform being licenced as a Digital Asset Service Provider under the revolutionary new Digital Assets Issuance Law of El Salvador. 

Granted by the National Digital Asset Commission of El Salvador, the new license is a considerable new achievement for Bitfinex in its strategy to offer financial freedom and inclusion to not only communities but countries on a global level, as mentioned in the Bitfinex Freedom Manifesto.

Paolo Ardoino, Chief Technology Officer of the Bitfinex group, said that they are happy for being the first company to be awarded the particular license. This will allow Bitfinex Securities to ease the issuance and secondary trading of assets with well-defined rights and obligations as per the new digital asset regulatory regime. 

Having said that, a complete range of entities ranging from small companies to governments can generate funds in a regulated environment and enter a class of investors that are comfortable with tokenized securities and crypto assets, representing a market of around $1 trillion with a peak of $3 trillion.

The Digital Asset Issuance Law was passed in January 2023 by El Salvador’s National Congress to promote escalated growth and financial advancement in the Central American country. El Salvador is the first country to adopt Bitcoin as legal tender in 2021 and now, it is developing on this foundation to make way for an even comprehensive and accessible financial ecosystem for international and domestic firms besides institutional and retail investors.

Jesse Knutson, Head of Operations at Bitfinex Securities, said that they have seen the significant demand from investors and issuers for products made possible under the new regulations, including yield-bearing assets, tokenized shares and other investment products.

Issuers are looking forward to accessing the digital asset market owing to its cost efficiencies, speed and issuance ease when compared to traditional assets. The digital asset market at around $1 trillion in size, is still in its early stage though it is expanding rapidly.

Firms from all over the world will be allowed to issue an extensive range of digital assets which includes bonds, equities and various other financial instruments through a recently-developed entity in El Salvador known as Bitfinex Securities El Salvador, S.A. De C.V. to ensure complete regulatory compliance under El Salvador law. 

The development opens up an exclusive opportunity for people and businesses to capitalize on the perks of investing, issuing and trading in digital assets in the favorable regulatory environment of El Salvador and to attain cost and efficiency benefits in comparison to raising capital in traditional finance. 

Bitfinex Securities El Salvador will run separately from Bitfinex Securities AIFC, the current platform of Bitfinex group. Bitfinex Securities AIFC is a digital asset platform launched in 2021 within the regulatory sandbox developed by the Astana International Financial Center. 

This year, Bitfinex Securities AIFC announced a noteworthy achievement in growing its worldwide presence with the opening of a new hub in Kazakhstan.

The recent announcement offers a significant lift to the consistent efforts of the Bitfinex group to promote financial freedom and inclusion in El Salvador and beyond. Other than large corporations, smaller corporations along with retail investors will be offered the opportunity to take part in global markets. 

The development highlights El Salvador’s quick transformation into a regional and international hub for high-tech financial advancement to create an alluring ecosystem for businesses to relocate from every corner of the world. 

Bitfinex Securities scheduled a robust channel in place of small and large issuances which will be announced throughout the remaining part of 2023.

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• Source: https://investorbites.com/bitfinex-securities-granted-first-ever-license-to-operate-in-el-salvador/