Bitfinex Securities has received the first digital asset service provider license from El Salvador’s Digital Assets Commission, the authority currently regulating crypto assets in the country. This licensing regime comes under the new Digital Assets Issuance Law passed by National Congress that came into force in January 2023. The bill aims to accelerate financial innovations in the state, allowing crypto firms to issue real-world tokenized assets.
El Salvador expressed a positive stance on cryptocurrencies with its move to become the first-ever country to give Bitcoin legal tender in 2021. With its ambitions to make the Latin American country a digital hub, the government paved the way for financial freedom by implementing crypto-friendly policies. In turn, crypto platforms around the globe are settling their shops in the country due to regulatory clarity.
Speaking on the achievement, Bitfinex said in a blog post;
El Salvador’s Digital Asset licence is a significant step forward for tokenised securities as an asset class. The licence opens the door wide open for entities like small companies and governments to raise capital in a regulated market with clear rules set forth under the DASL. In addition to raising capital through token issuance, it lays out rules for new kinds of tokenised securities like tokenized shares, yield-bearing assets, and other investment products.
Bitfinex Securities Will Operate Independently
The announcement affirmed that Bitfinex Securities is a new entity that will function differently from other similar platforms established around the globe. In other words, Bitfinex Securities will run independently from Bitfinex Securities AIFC, a platform controlled by Bitfinex Securities Limited. The license granted to the firm gives it legal authorization to issue tokenized assets such as bonds and equities and facilitate their trading.
Expressing his concerns over products developed under the new regulatory regime, Jesse Knutson, head of operations at Bitifinex Securities, added that a considerable amount of issuers and investors are “eager to access the digital asset market, attracted by the speed, cost efficiencies and ease of issuance compared to traditional assets.”
Chief Technology Officer at Bitfinex group, Paolo Ardoino, explained;
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.
President of El Salvador, Nayib Bukele, which recognized digital assets as a source to counter the state’s hyperinflation and dependency on the US dollar, sent a bill to Congress on April 1 suggesting government authorities exempt taxes on innovative developments.
Bitifinex is expanding its reach globally. Its security token platform (STO) went live in Kazakhstan in 2022. In September 2021, Bitifinex announced that the platform is registered with Kazakhstan’s Astana International Financial Center (AIFC).