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Bitfinex has become the inaugural cryptocurrency exchange to receive registration as a Digital Asset Service Provider (DASP) from the regulators in El Salvador.
The Latin American nation is at the forefront of the sector, having adopted bitcoin as legal tender in 2021. Under President Nayib Bukele’s administration, it has acquired significant amounts of the leading cryptocurrency on a macroeconomic scale and initiated various BTC-related projects.
‘Pleased to Be the First’
In a recent blog entry, Bitfinex characterized the approval granted by El Salvador’s National Digital Asset Commission as a significant achievement in its long-term vision “to provide financial freedom and inclusion to communities and nations globally.”
Paolo Ardoino – the platform’s CTO – expressed that the organization is “pleased” to be the first to hold such a license. “This will allow Bitfinex Securities to facilitate the issuance and secondary trading of assets with clearly defined rights and obligations as stipulated in the new digital asset regulatory framework,” he stated.
The registration will also enable entities (ranging from small businesses to governmental bodies) to raise funds and engage with investors involved in the asset class.
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Jesse Knutson – Head of Operations at Bitfinex Securities – noted that the interest in products encompassed by the new regulations, including tokenized shares and yield-generating assets, has significantly increased recently.
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“Issuers are keen to enter the digital asset market, drawn by the speed, cost-effectiveness, and simplicity of issuance compared to traditional assets. The digital asset market, valued at over $1 trillion, is still in its early stages but is expanding rapidly,” he added.
El Salvador’s latest cryptocurrency regulatory framework – the Digital Asset Issuance Law – was enacted in January 2023 after receiving approval from the National Congress. Its primary objective is to foster financial innovation and stimulate economic growth in the region.
The nation’s authorities intend to build upon this legislation by regulating the activities of both retail and institutional investors.
El Salvador: the Land of Bitcoin
The small Central American country, once labeled as the murder capital of the world, gained attention in September 2021 by designating bitcoin as an official payment method within its borders.
The government, under President Bukele’s leadership, launched several initiatives related to the prominent digital asset in the subsequent years, including accumulating BTC on a macroeconomic scale, constructing a large veterinary hospital where patients can use the asset for payments, and planning a high-tech city.
The proposed “Bitcoin City” will be situated near the Conchagua and Tecapa volcanoes and will harness their geothermal energy for its power needs. Notably, BTC will serve as the primary currency, and the layout of the urban area is designed in a circular shape to symbolize the coin’s logo when viewed from above.
Bukele recently emphasized the asset as a key factor in the increase of tourism in El Salvador and its enhanced reputation:
“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.”
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