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El Salvador Grants its First Crypto Licence to Bitfinex

AA News - Dimitar Dzhondzhorov 2023-04-13 08:00

Bitfinex became the first cryptocurrency exchange to be registered as a Digital Asset Service Provider (DASP) by the regulators of El Salvador.

The Latin American country is a pioneer in the industry, embracing bitcoin as a legal tender in 2021. Under the rule of President Nayib Bukele, it purchased amounts of the primary cryptocurrency on a macroeconomic level and launched numerous BTC-related initiatives.

‘Delighted to Be the First’

In a recent blog post, Bitfinex described the authorization obtained by El Salvador’s National Digital Asset Commission as a milestone in its long-term strategy “to deliver financial freedom and inclusion to communities and countries around the world.”

Paolo Ardoino – CTO of the platform – said the entity is “delighted” to be the first with such a 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,” he explained.

The registration will also allow entities (from small firms to governments) to raise capital and interact with investors who deal with the asset class.

Jesse Knutson – Head of Operations at Bitfinex Securities – said the demand for products included under the new regulations, such as tokenized shares and yield-bearing assets, has surged recently. 

“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,” he added.

El Salvador’s newest cryptocurrency regulatory framework – the Digital Asset Issuance Law – saw the light of day in January 2023 after receiving a green light from the National Congress. Its main goal is to support financial innovation and the economic growth of the region. 

The country’s authorities plan to build on top of this legislation by regulating the operations of retail and institutional investors.

El Salvador: the Land of Bitcoin

The small Central American nation, previously proclaimed as the murder capital of the world, made the headlines in September 2021 by declaring bitcoin as an official payment method on its territory.

The government, led by President Bukele, initiated several projects related to the leading digital asset in the following years, such as accumulating BTC on a macroeconomic level, building a massive vet hospital where patients can use the asset as a payment method, and designing a high-tech town.

The so-called “Bitcoin City” will be located close to the volcanoes Conchagua and Tecapa and will use their geothermal energy to power itself. Needless to say, BTC will be the main currency, while the design of the urban area will be in the shape of a circle so it could represent the coin’s logo when looked at from above.

Bukele recently highlighted the asset as one of the primary reasons for El Salvador’s boosted tourism levels and fixed legacy:

“We have increased tourism by 95%, and that’s in part because of bitcoin. There’s a lot of bitcoiners that want to go to the country where bitcoin is legal tender, we have bitcoin conferences.”

The post El Salvador Grants its First Crypto Licence to Bitfinex appeared first on CryptoPotato.