El Salvador Grants Digital Assets License to Bitfinex

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El Salvador, also known as the country that accepted Bitcoin as its native currency around 2 years ago, has just granted its first digital asset license to reputable exchange Bitfinex. It was issued after the Legislative Assembly passed a law in January that regulated digital securities. The law created a framework for El Salvador to launch new Bitcoin-backed bonds – the well-known volcano bonds. It also created a framework for the new licenses, of which the first one was granted to Bitfinex.

Representatives from Bitfinex said that the company was delighted to be granted the license. With it, Bitfinex securities will be traded within a clear framework. In short, they will be trading legally, which is what El Salvador has wanted all along.

A New Dawn

This move was expected by many experts. When El Salvador ditched the US Dollar for Bitcoin, tempers flared high. Other countries were enraged, and there was inner turmoil regarding the decision too. Bit by bit, the country’s Legislative Assembly was working on solutions to expand the framework on digital securities which will allow legal sharing of digital securities and the issuing of volcano bonds that seem to be lava-hot among investors.

The new framework was passed into law in January. Bitfinex has received the first license not two months later. With it, it’s now the world’s first international digital asset platform that has received an approval from El Salvador’s new Digital Assets Issuance law. It’s a big milestone for all of South America and a staple of newly found financial freedom.

Bitfinex is now free to offer its services to El Salvador customers. It fully expands its global reach, and should have a major impact on the crypto market, especially in growth. More and more people will have access to digital assets and their benefits. According to Bitfinex, the company has received a lot of interest for investment products enabled by the new regulations from issues and investors. Among the most popular products on offer are tokenized assets and yield-generating assets.

While some nations have criticized the move—especially the IMF which isn’t fond of El Salvador—the South American country remains committed to blockchain technology.

In a further move that will make cryptocurrencies even more popular in El Salvador, its tech-savvy president Nayib Bukele has announced full elimination of taxes on technological advancements. With no tax on technology, you can be sure El Salvador will attract investors.

The SEC Urges Aggressive Enforcement on Cryptos

While some countries like El Salvador are openly embracing the blockchain and cryptos, others are working against it. For example, the US SEC has just decided that most tokens will be treated as securities, adopting an even more aggressive enforcement on crypto laws than earlier.

Representatives from the SEC have stated that they will continue to treat crypto tokens as digital securities. All platforms and custodians dealing in them will also be subject to the SEC’s harsh laws. The watchdog is simply upholding its chairman Gary Gensler’s view, which isn’t good news for American investors.

April 12, 2023: • No Comments

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