1. PixelPlaygroundHome
  2. Metaverse Insights

El Salvador Grants Bitfinex its First Digital Asset Service Provider License

• Metaverse Insights • 120 views

According to reports, El Salvador has granted Bitfinex the country\’s first digital asset service provider license. The new license was issued following a law passed by the legislat

El Salvador Grants Bitfinex its First Digital Asset Service Provider License

According to reports, El Salvador has granted Bitfinex the country’s first digital asset service provider license. The new license was issued following a law passed by the legislative assembly of El Salvador in January that regulated digital securities and created a framework for Central American countries to issue bitcoin backed bonds, also known as volcanic bonds.

El Salvador Grants Bitfinex’s First Digital Asset License

On the 6th of July, 2021, El Salvador became the first country to grant Bitfinex a digital asset service provider license. This move came after the country’s legislative assembly enacted a law in January 2021 to regulate digital securities and create a framework for Central American countries to issue bitcoin-backed bonds, also known as volcanic bonds.

Understanding El Salvador’s New Law

El Salvador’s new law aims to create an ecosystem for digital securities to thrive. The legislation defines digital assets as a representation of value, either digital or virtual, that is used as a medium of exchange, store of value, or unit of account.
The law’s framework allows for the issuance, negotiation, and transfer of digital securities. It also provides for the creation of a register of digital securities maintained by the Superintendency of the Financial System (SSF). The SSF will serve as the primary regulatory body for digital asset service providers in the country.

Bitfinex’s New License

Bitfinex is a leading digital asset exchange that offers services to traders and investors worldwide. The exchange has been granted a digital asset service provider license in El Salvador, allowing it to operate in the country legally.
This new license will enable Bitfinex to offer its customers an array of digital asset-related services, including trading, investing, and managing cryptocurrencies. The company will also allow Salvadorans to purchase bitcoin-backed volcanic bonds. These bonds will allow the government to raise funds while leveraging bitcoin’s price volatility.

The Significance of Bitcoin-Backed Bonds

Bitcoin-backed bonds, also known as volcanic bonds, are a new investment product that leverages bitcoin’s volatility to raise capital. These bonds are similar to traditional bonds, except that they are backed by bitcoin. In case of default, the bondholders receive bitcoin instead of traditional fiat currency.
By issuing bitcoin-backed bonds, El Salvador aims to raise capital and leverage the benefits of bitcoin’s decentralized nature. Bitcoin’s decentralized nature ensures that transactions are transparent, immutable, and secure. This quality makes it an ideal asset for issuing bonds.

Conclusion

El Salvador’s move to grant Bitfinex its first digital asset service provider license is a significant development in the digital asset industry. This move will enable Bitfinex to operate legally in El Salvador, making it the first company to offer digital asset-related services in the country.
The issuance of bitcoin-backed volcanic bonds is an innovative way of raising capital that leverages the benefits of bitcoin’s decentralization. This development will allow more investors to participate in bitcoin’s growth while also benefiting the Salvadoran government.

FAQs

Q: What is a digital asset service provider license?
A: A digital asset service provider license is a license granted to a company that provides digital asset-related services.
Q: What are bitcoin-backed bonds?
A: Bitcoin-backed bonds, also known as volcanic bonds, are bonds that are backed by bitcoin. In case of default, the bondholders receive bitcoin instead of traditional fiat currency.
Q: What are the benefits of issuing bitcoin-backed bonds?
A: Issuing bitcoin-backed bonds allows for the leveraging of bitcoin’s decentralized nature, making transactions transparent, immutable, and secure. It also allows for more investors to participate in bitcoin’s growth.
#

This article and pictures are from the Internet and do not represent Fpips's position. If you infringe, please contact us to delete:https://www.fpips.com/15306/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 04/12/2023 20:01
Next 04/12/2023 20:50

Recommended articles