Binance is one of the first exchanges to be approved for new crypto licenses from El Salvador. The move will give the largest crypto exchange the opportunity to provide more bespoke services to users based in the Central American country.
Meanwhile, the National Commission of Digital Assets granted a Digital Assets Services Provider license.
Following these new regulatory approvals, Binance said it will offer exclusive crypto products to its Latin American users.
Binance’s future in El Salvador
Min Lin, Binance’s head of Latin America, revealed that it had taken the crypto exchange many months to complete this process and acquire these licenses.
“We are grateful to the Central Reserve Bank and the National Commission of Digital Assets,” Lin said.
“Their blockchain technology adoption has created a thriving sector in El Salvador that proves security and innovation are complementary assets. Now, it joins countries around the world that have granted Binance a regulatory license.”
Binance now has regulatory approval in 18 different markets, including Spain, France, Italy and Dubai.
Gaining these licenses in El Salvador opens up development and product opportunities for the cryptocurrency exchange.
Daniel Acosta, Binance’s General Manager for Colombia, Central America and Caribbean, said: “These licenses allow Binance to expand the products and services offered including options tailored to the needs of our customers in El Salvador.”
He also noted the “great opportunity to collaborate closely with government authorities to support the adoption of crypto assets in the country, foster financial inclusion, innovation and ensure customer protection”.
Bitfinex’s regulatory approval
Binance is among the first international platforms to be granted the Digital Asset Service Provider license.
Earlier this year, rival exchange Bitfinex was given approval by the National Commission of Digital Assets. It said it was the “world’s first international digital asset platform to receive” it.
The exchange recently launched an entity titled Bitfinex Securities El Salvador. Following the regulatory approval, Bitfinex said this license would give it opportunities to issue digital assets including equities and bonds.
Jesse Knutson, head of operations at Bitfinex Securities, said: “We see considerable demand both from issuers and investors for the products made possible under the new regulations, which include tokenized shares, yield-bearing assets, and other investment products.”
El Salvador’s crypto history
The country’s positive stance on crypto came to light when it recognised Bitcoin as legal tender in 2021.
But El Salvador’s President Nayib Bukele faced criticism a year after. The country reportedly lost $60million as a result of the move.
Meanwhile, Bitcoin was not being used by residents despite $375m being spent to fund El Salvador’s decision. High volatility and fees from the cryptocurrency were fuelling this, according to CNBC.
Then, at the beginning of this year, El Salvador passed a law introducing the two new crypto licenses, which have since been granted to Binance.
The legislation said: “The purpose of this law is to establish the legal framework that grants legal certainty to transfer operations to any title of digital assets used in public issuance offers.”
This new regulation was approved to start attracting local and international investors. It was also designed to create new financing opportunities for the government, companies, and even citizens.
El Salvador’s Bitcoin office tweeted following the news: “Today El Salvador builds on our first-mover advantage by passing landmark legislation establishing a legal framework for all digital assets that are not bitcoin. As well as those issued on bitcoin.”