Crypto exhange Bitfinex takes another step forward in El Salvador with the award of a Digital Asset Service Provider (DASP) license for its derivatives division. This expansion comes against a complex backdrop as the Central American country navigates between its commitment to cryptocurrencies and its relationship with international financial institutions.
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Bitfinex moves from Seychelles to El Salvador
El Salvador’s favorable regulatory framework continues to attract big names in the crypto industry. The spin-off division of Bitfinex has announced last week its decision to relocate its operations from the Seychelles to El Salvador, following the granting of its DASP license. This strategic migration is part of the country’s ongoing efforts to become a major crypto hub.
Since the adoption of the Digital Assets Securities Law in January 2023, El Salvador has already welcomed several major players in the sector, including Bitfinex Securities which obtained its license in April 2023.
El Salvador’s regulatory framework offers opportunities for crypto businesses, notably enabling the tokenization of a variety of assets. Bitfinex has already exploited these possibilities by launching a tokenized public offering of U.S. Treasury bonds last November, although a previous attempt to tokenize a hotel project had not met with the expected success.
Between adopting bitcoin and negotiating with the IMF
This extension of Bitfinex comes at a particular time for El Salvador. The country recently reached the symbolic milestone of 6,000 Bitcoin in reserve, valued at around $569.3 million, posting a remarkable performance with a capital gain of 108.02%. However, this policy now has to come to terms with a new agreement with the IMF, which granted a $1.4 billion loan to the country, with certain restrictions on the use of Bitcoin.
Despite these constraints, the Salvadoran government is staying the course on financial innovation. Stacy Herbert, Director, National Bitcoin Officer, ecently spoke of a possible acceleration in acquisitions. At the same time, structural changes are on the horizon, with the potential privatization of the Chivo wallet the country’s official Bitcoin wallet.
The installation of Bitfinex Derivatives in El Salvador thus marks a new stage in the development of the country’s crypto ecosystem, illustrating its ability to attract major players while managing the balance with traditional financial institutions.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
