Bitfinex Receives First Digital Service License From El Salvador

Updated: 12 April 2023

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Bitfinex has become the first crypto platform to acquire El Salvador’s digital asset service provider license. The license follows the law passed in January by El Salvador’s National Congress to provide increased financial innovation and growth in the Central American country. Notably, the law established a regulatory framework for digital securities. It paved the way for the launch of bitcoin-backed bonds, also referred to as “Volcano Bonds.”

We are now the world's first international digital asset platform to receive approval for a Digital Asset Service Provider license under El Salvador’s new Digital Assets Issuance Law! A milestone for financial freedom in Latin America.@bitfinex https://t.co/88Mmmi5s6M

— Bitfinex Securities (@BFXSecurities) April 11, 2023

According to the announcement, the license, granted on April 11 by El Salvador’s National Digital Asset Commission, ranks Bitfinex as the world’s first international digital asset company to gain approval as a Digital Asset Service Provider in El Salvador. Further, Bitfinex Securities El Salvador has shown its delight via its Twitter post, noting:

It’s a milestone for financial freedom in Latin America.

On the other hand, Bitfinex Chief Technology Officer has given his remarks concerning the license, asserting:

The license will allow Bitfinex Securities to facilitate the issuance and secondary trading of assets with clearly defined rights and obligations as highlighted in the new digital asset regulatory regime.

However, the announcement further stated that Bitfinex Securities El Salvador’s newly formed entity would facilitate a regulatory-compliant platform for all firms worldwide to issue digital assets such as bonds and equities. This will offer a unique chance for individuals and other businesses to leverage the advantage of issuing, investing, and trading digital assets in the favorable environments of El Salvador.

The new regulation may lead to the launch of tokenized shares.

Additionally, the Head of Operations at Bitfinex Securities, Jeff Knutson, noted that the new regulation would allow tokenized shares and yield-bearing assets to be launched. However, tokenized securities are considered innovative, integrating technological advancements provided by cryptocurrencies, such as Bitcoin, into the traditional regulated securities offerings. This provides numerous disruptive advantages that show securities markets duplicate.

Noteworthy, tokenized securities facilitate several advantages. Some include instant trade settlement, the capacity of self-custody and trade securities peer-to-peer (P2P), cryptographically verified transactions, and round-the-clock trading.

Nonetheless, it is worth noting that the Nation’ (El Salvador) position as a pioneer in Bitcoin adoption, together with its newly established Bitcoin embassies and Digital Assets Service Provider licenses, makes it an incredible venue for a new and disruptive global tokenized security market.

Bitfinex expansion

Nonetheless, Bitfinex Securities El Salvador will function independently from Bitfinex’s group’s current platform, Bitfinex Securities AIFC, which Bitfinex Securities Limited manages. On the other hand, Bitfinex has continued to grow wings in its global reach. Last year, Bitfinex’s security token went live in Kazakhstan. In September 2021, the security token platform (STO) revealed that it is regulated under the Astana International Financial Centre (AIFC) in Kazakhstan.