After receiving a Digital Asset Service Providers (DASP) license in El Salvador, a prominent crypto derivatives firm has transitioned its derivatives operations to this Central American nation. Previously, these services were based in Seychelles. The exchange announced that going forward, its derivatives services will be managed by a new entity established in El Salvador.
Users are now required to accept new terms and conditions related to this entity to continue trading derivative products. The move has been justified as part of a broader push to support innovative trading solutions in regions that may be underserved, especially in Latin America.
The firm first secured its license in El Salvador in April 2023, following the passing of the Digital Asset Issuance Law three months earlier. This law, enacted under a government that is favorable toward cryptocurrencies, facilitates the tokenization of various assets, including funds, equity, debt, and real estate. It aims to streamline capital raising by allowing companies to issue tokens and fund projects, which ultimately can lead to returns for investors.
In addition to derivatives, the firm also launched a product last November that involves tokenized US Treasury bills, which are denominated in dollars. However, it faced challenges when an earlier tokenization initiative in July 2024 failed to meet its funding goal of $500,000, leading to the need to refund investors. This initiative aimed to support the development of a Hampton by Hilton Hotel.
Under the current leadership, El Salvador has positioned itself as a welcoming environment for cryptocurrency businesses by implementing clear regulations. It made headlines in 2021 by being the first country to legalize Bitcoin as an official currency and has reportedly amassed a considerable Bitcoin reserve.
Despite these developments, El Salvador’s crypto policies have drawn criticism from global economic analysts, including concerns raised by the International Monetary Fund regarding the adoption of Bitcoin as legal tender and overall cryptocurrency regulations.
In addition to El Salvador, other regions such as Dubai are emerging as attractive hubs for cryptocurrency exchange and services, with many blockchain companies receiving licenses in the United Arab Emirates. As the global landscape of cryptocurrency regulation continues to evolve, various jurisdictions are competing to establish themselves as preferred locations for crypto operations.