By
Steve Muchoki
April 19th, 2024
As Bitfinex has said, acquiring the license in El Salvador is a significant milestone, as it opens the way for small and medium-sized companies, corporations, and retail investors the opportunity to participate in global markets.
Bitfinex Securities Ltd, one of the first and largest digital currency exchanges offering state-of-the-art services for crypto traders and global liquidity providers, has made history in El Salvador, becoming the first-ever fully regulated crypto trading platform to receive a Digital Asset license in the country.
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
As Bitfinex has said in its announcement, acquiring the license in El Salvador is a significant milestone, as it opens the way for small and medium-sized companies, corporations, and retail investors the opportunity to participate in global markets.
Bitfinex CTO Paolo Ardoino commented:
“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.”
This is the first license granted under the Digital Assets Securities Law (DASL) passed by the government of El Salvador in January this year. Within DASL, El Salvador has established a legal framework around the issuance of digital assets and the broader crypto token classification. Besides, it created a way to move towards a so-called Volcano Bond or Volcano Token that enables generating funds through the world’s first sovereign Bitcoin (BTC) bond. The latter aims to raise as much as $1 billion generated mostly from the geothermal Bitcoin mining operation, which harnesses energy from the nation’s active volcanoes. Notably, the bill was secured by an overwhelming 62 Congress votes, while 18 members voted against it.
Since Bitfinex has been granted a digital asset license, it will perform as a technology provider for Volcano Token. As such, Bitfinex will offer services that will enable investors to get access to new sources of funding and innovative financial products.
Bitcoin’s Progressive Adoption in El Salvador
El Salvador President Nayib Bukele has long been promoting cryptocurrency as a path to financial freedom. Since September 2021, Bitcoin has been in a status of a legal tender in the country, which means that all businesses in El Salvador are required to accept the cryptocurrency. Besides, the government has been buying Bitcoin as part of its treasury. The biggest purchase was made in May 2022, when El Salvador bought 500 BTCs for a whopping $15.3 million. Last June, the country added another 80 BTCs to its portfolio, spending $1.52 million on the purchase. Even when the Bitcoin price crashed last summer, El Salvador did not lose its belief in the crypto, dismissing any financial risks associated with the volatile nature of digital assets.
In November last year, the government went further, establishing the first National Bitcoin Office to coordinate local efforts related to the currency. The Office will “design, diagnose, plan, program, coordinate, follow up, measure, analyze and evaluate plans, programs, and projects related to Bitcoin.”
Currently, the El Salvador government is also considering opening a so-called “Bitcoin embassy” in Texas, United States.