Yesterday, Bitfinex Securities announced that it received the first Bitcoin and Digital Asset license issued by the Central American state El Salvador.
— Bitfinex Securities (@BFXSecurities) April 11, 2023
Indeed, El Salvador only recently passed the new securities law for digital assets, with the new regulatory framework only taking effect from the beginning of this year.
The first ever license issued in this regard is the one with Bitfinex Securities, a company under the iFinex Group (Bitfinex, Tether), which will be responsible for issuing the Central American state’s Bitcoin Bonds.
Bitfinex Securities: El Salvador and the license for Bitcoin and Digital Assets
Bitfinex Securities thus became the first fully regulated digital asset exchange to receive a license for digital assets in El Salvador.
The license was issued under the Digital Asset Securities Law (DASL), and will allow Bitfinex to issue tokenized securities in the Salvadoran market.
Through this, companies large and small, and governments, will be able to raise capital in a regulated market with clear rules established by the DASL by issuing tokenized securities. What’s more, DASL also establishes rules for new types of tokenized securities alongside stocks, such as interest-bearing assets and other investment products.
One of these securities will be El Salvador‘s government-issued Bitcoin Bond, or Volcano Bond.
The goal of Bitfinex Securities is to become a leader in the innovative tokenized asset sector so that it can also offer small and medium-sized companies the opportunity to take advantage of global markets to raise capital.
The exchange will provide services that enable access to new sources of funding, while expanding investor access to a new set of innovative financial products.
In the official statement they write:
“We also remain committed to El Salvador and President Bukele’s vision for Bitcoin adoption. We will continue to stand behind El Salvador’s financial revolution by assisting educational efforts like Mi Primer Bitcoin, Layer 2 technologies like Lightning Network and RGB and as a technology provider for El Salvador’s much anticipated Volcano token.”
Tokenized assets: from the real world to the blockchain world
Tokenizing assets such as stocks or bonds brings benefits that simply did not exist before.
For one thing, it makes the secondary market for stocks accessible to companies that until now have been excluded from it. Indeed, tokenizing stocks makes it possible to easily offer tokens for sale on exchanges specializing in digital assets, while bringing stocks to traditional exchanges remains extremely difficult and expensive.
It also allows purchases of fractions of digital assets as well, making it possible for small or very small savers to access digital asset markets.
It is a kind of merger between the traditional financial market and the crypto market, where everything turns out to be a bit simpler and more affordable.
Indeed, tokenized securities are potentially a financial revolution, because they constitute a technological leap forward enabled by the use of new technologies such as blockchain.
In addition, thanks to regulations such as the Salvadoran DASL, they can be traded on regulated markets, instantly, securely and verifiably.
What’s more, they also offer self-custody and P2P exchanges, on markets that are open 24 hours a day, 365 days a year. These are all advantages that traditional marketplaces simply do not offer.
El Salvador making history with Bitcoin and crypto-assets
According to Bitfinex Securities, El Salvador is now the world’s first credible location for a disruptive new global tokenized security market.
Everything began in September 2021, when the Central American state officially adopted Bitcoin as legal tender alongside the US dollar (El Salvador does not have its own currency).
This opened the door wide in the country for the mass adoption of blockchain technology, enabling the small nation to become Latin America’s most important crypto hub.
It is clear that the strategy of the Bukele government is precisely to insist on this path, so as to attract not only capital, but especially innovative companies that are trying to build an innovative financial system based on new technologies.
For now, this strategy seems to be working, although it is a long path made up of many small achievements that are accumulated month after month.
Tokenized securities are potentially a worldwide market, and the fact that El Salvador to date still seems to be the only credible location in the world for this market, thanks to its innovative Digital Asset Securities Law, makes it a nation with enormous potential for development.
It is important not to forget that El Salvador is a poor country, with a GDP per capita still lower than that of, for example, Iraq, Lebanon, or Vietnam. The path taken by the Bukele government may be able to bring the country out of this terrible condition that has very old and deep historical roots.