Bitfinex Secures El Salvador’s First-Ever Digital Asset License
By Adedapo Adesanya
Bitfinex has become the world’s first international digital asset platform to receive a license as a Digital Asset Service Provider in El Salvador.
Under El Salvador’s ground-breaking new Digital Assets Issuance Law (Ley de Emisión de Activos Digitales), Bitfinex Securities El Salvador S.A. de C.V. (Bitfinex Securities El Salvador), a fully-regulated digital asset exchange will be able to issue and trade innovative real-world tokenized assets such as equities and bonds.
Bitfinex said the new license marks a significant new milestone in its long-term strategy to deliver financial freedom and inclusion to communities and countries around the world, as outlined in the Bitfinex Freedom Manifesto.
“We are delighted to be the first company to be awarded this license. It will enable Bitfinex Securities to facilitate the issuance and secondary trading of assets with clearly defined rights and obligations as outlined in the new digital asset regulatory regime”, said Mr Paolo Ardoino, Chief Technology Officer of the Bitfinex group.
“It means that a whole range of entities, from small companies to governments, can raise capital in a regulated environment and tap into a class of investors that are extremely comfortable with crypto assets and tokenized securities, which represents a market of over $1 trillion with a peak of $3 trillion.”
Passed by El Salvador’s National Congress in January 2023, the Digital Asset Issuance Law aims to foster increased financial innovation and growth in the Central American country.
As the world’s first nation to adopt Bitcoin as legal tender in 2021, El Salvador is now building on this foundation, paving the way for a more inclusive and accessible financial environment for both foreign and domestic companies, as well as retail and institutional investors.
“We see considerable demand both from issuers and investors for the products made possible under the new regulations, which include tokenized shares, yield-bearing assets, and other investment products,” said Mr Jesse Knutson, Head of Operations at Bitfinex Securities.
“Issuers are eager to access the digital asset market, attracted by the speed, cost efficiencies, and ease of issuance compared to traditional assets. The digital asset market is a market which, at over $1 trillion in size, is still in its infancy but is growing tremendously quickly.”
Bitfinex said companies from around the world would be able to issue a broad range of digital assets, including equities, bonds and other financial instruments via a newly-formed entity in El Salvador called Bitfinex Securities El Salvador, S.A. De C.V., ensuring full regulatory compliance under El Salvador law.
The development also presents a unique opportunity for both businesses and individuals to capitalise on the benefits of issuing, investing, and trading in digital assets in El Salvador’s favourable regulatory environment and to capture high cost and efficiency advantages compared to the process of raising capital in traditional finance.
Bitfinex Securities El Salvador will operate separately from the Bitfinex group’s existing platform, Bitfinex Securities AIFC, operated by Bitfinex Securities Limited. Established in 2021, Bitfinex Securities AIFC is a 365/24/7, digital asset platform operating within the regulatory sandbox established by the Astana International Financial Center, which allows previously-underserved companies – and potentially entire countries – to access new sources of funding while widening investor access to a host of innovative financial products, including blockchain-based equities and bonds.
Earlier this year, Bitfinex Securities AIFC announced a major milestone in terms of its expanding global presence with the opening of a new hub in Kazakhstan, another country that has attracted considerable global interest in recent years due to its forward-thinking approach to regulation.
This also provides a major boost to the Bitfinex group’s continuous efforts to promote financial freedom and inclusion in El Salvador and beyond, offering not only large corporations but also smaller, otherwise-marginalised companies, as well as retail investors, the opportunity to participate in global markets.
The development also highlights once again El Salvador’s rapid transformation to become a regional and global hub for high-tech financial innovation, creating an attractive environment for businesses to relocate to from around the world.