The authorization was issued by the local regulator under the new law on digital asset issuance

​Bitfinex becomes the first licensed exchange in El Salvador

12.04.2023 - 07:20

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4 min

What’s new? On April 11, El Salvador’s National Digital Asset Commission (NCDA) issued the country’s first service provider license to cryptocurrency exchange Bitfinex. The platform’s team called the permit “a historic victory for financial freedom in Latin America and beyond.” The license was issued under El Salvador’s law on digital asset issuance, passed by the National Congress in January 2023, and aimed at stimulating financial innovation.

Bitfinex Blog

What else does the blog say? Bitfinex Group CTO Paolo Ardoino said that the license will allow the exchange to facilitate the issuance and secondary trading of cryptocurrencies with clearly defined rights and responsibilities, as outlined in the new regulatory regime for digital assets. “It means that a whole range of entities, from small companies to governments, can raise capital in a regulated environment, and tap into a class of investors that are extremely comfortable with crypto assets and tokenized securities, which represents a market of over $1 trillion,” he explained.

Jesse Knutson, Head of Operations at Bitfinex Securities, said that the exchange is seeing significant demand from both issuers and investors for products that include tokenized stocks. He said, “Issuers are eager to access the digital asset market, attracted by the speed, cost efficiencies, and ease of issuance compared to traditional assets.” Knutson noted that despite high volumes, the digital asset market is in its infancy while growing very quickly.

Last July, Bitfinex donated $1,3 million in cryptocurrencies to El Salvador to help small businesses and communities. For example, the exchange donated 36 BTC and 600 000 USDT to businesses in the most socially disadvantaged areas of the country. The USDT stablecoin is issued by Tether, which, like Bitfinex, is a subsidiary of iFinex.

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El Salvador and bitcoin. Authorities legalized BTC and started investing in it in September 2021, losing $12 million four months later. A year after legalization, 77% of citizens opposed spending the state budget to buy bitcoins, and the IMF refused to give El Salvador a loan. Authorities began buying 1 BTC every day on November 18 and then created a National Bitcoin Office to manage crypto projects.

In February, El Salvador’s authorities opened a bitcoin embassy in Texas. At the same time, the IMF suggested that the state refuse to invest in BTC.

In March, President Nayib Bukele said that tourist flow to El Salvador almost doubled after the legalization of BTC. In April, the state bitcoin wallet Chivo began freezing addresses interacting with mixers.

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