The Bitcoin industry should favor the jurisdictions that favor it, Bitfinex chief technical officer Paolo Ardoino argued in a livestreamed conversation with Blockstream CEO Adam Back on Feb. 27. The executives were discussing Bitcoin and securities tokenization.
Securities tokenization may have a profound impact on the financial world, the speakers agreed. One impact may be rising user expectations. Banks use messaging and settlement technology that is often 40 years old. It presents challenges for speed and interoperability, Ardoino said. Meanwhile, tokenization “brings all the benefits of Bitcoin to everyone else.”
Tokenization will reduce costs, allowing small businesses to enter the market, Back said. Bitcoin (BTC) exchange-traded funds (ETFs) will improve tax reporting and inheritance planning. It could provide BTC access to a new audience and may lead to innovations like BTC mortgages, which could allow many people who have nontraditional employment to buy ahouse.
Never seen before emails from Satoshi have been released!
Satoshi and Adam chatted about Bitcoin 4 months before it launched.
Adam Back provided these for court records in the CSW case.
(h/t @pete_rizzo_) pic.twitter.com/JZSp70duNi
— Dan Held (@danheld) February 22, 2024
The crypto industry will likely feel the impact as well as investors shift their attention from “too many useless tokens,” in the words of Ardoino, to more reliable and predictable financial products such as BTC ETFs.
Blockstream Mining Notes, which provide exposure to BTC mining, mature this summer, Back said. The notes are securitized under Luxembourg law.
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Bitfinex Securities is licensed in Kazakhstan’s Astana International Financial Centre (AIFC) economic zone and in El Salvador. Bitfinex head of operations Jesse Knutson, who moderated the discussion, said, “Sometimes when I am speaking to investors or issuers, […] those two jurisdictions raise an eyebrow. It’s not the first jurisdictions people think of when they think of global capital markets.”
“Unfortunately, when I look at London and, maybe, Frankfurt, or other jurisdictions around the world, they’re in a declining trajectory. […] Something happened in 2008, and they did it,” Ardoino replied, adding:
“We, as the Bitcoin industry, should recognize the jurisdictions that are doing more and believing more in the Bitcoin industry and have the highest chances to lead the way when it comes to digital assets and tokenized securities.”
Bitfinex Securities launched in the AIFC in 2021. It opened in El Salvador at the end of January. It issued a Tether (USDT) denominated bond on Blockstream’s Liquid Network in October that was initially met with limited enthusiasm. The Liquid Network is a BTC layer 2 protocol.
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