As Bitcoin’s (BTC) price drop rattles the cryptosphere, Bitfinex is set to launch a new platform. The exchange will set up Bitfinex Securities, a platform specializing in security tokens.
Kazakhstan, the new mecca of the cryptosphere?
Kazakhstan has taken significant steps to open up to the crypto ecosystem. As of 2019, French operators have begun to set up shop in the country to take advantage of its low-cost green electricity.
Nevertheless, the country’s openly pro-crypto attitude only dates back to this year. On the one hand, soaring digital asset prices have made the ecosystem more attractive. On the other hand, China’s regulatory attacks on cryptocurrencies and mining have prompted other countries to open up to cryptocurrencies in order to take advantage of China’s downgrade.
As a result, Kazakhstan has released a roadmap to spur the development of the cryptocurrency and blockchain technology industry in the region. And this strategy seems to be paying off, as mining giant Canaan has announced its relocation to Kazakhstan.
According to data published by the Cambridge Centre for Alternative Finance, Kazakhstan has increased its BTC mining capacity by a factor of 6, over the past 2 years. In fact, in September 2019, the country accounted for 1.4% of the world’s hashrate, compared to 8.2% currently.
Bitfinex sets up shop in Kazakhstan
The Bitfinex exchange is regularly under fire for digital asset-related disputes. That’s certainly why the giant behind USDT is launching a subsidiary in Kazakhstan.
In a press release on September 6, the exchange announced the launch of a security token offerings (STO) platform domiciled in the country. For now, only the Bitfinex Securities platform will be based in Kazakhstan. The rest of the exchange’s activities remain domiciled in Hong Kong.
As a reminder, security tokens are cryptographic financial securities. These securities represent ownership of a traditional asset, such as real estate or stocks.
Bitfinex Securities will be regulated by the Astana International Financial Center (AIFC). In addition, the STO platform will operate under the AIFC Fintech Lab, a regulatory sandbox aimed at supporting the development of the financial industry.
The platform is aimed at two types of clients. It will allow companies to list their stocks, bonds or tokenized funds and raise capital. Afterwards, users will be able to trade these tokenized securities.
“Kazakhstan is an emerging hub in Asia, well positioned geographically to serve our Asian and European markets and the country is well positioned to play a major role in this emerging alternative financial system.”Paolo Ardoino, CTO (Chief Technology Officer) of Bitfinex Securities
Security tokens are becoming more and more popular, and exchanges have understood this. Indeed, Binance, FTX and now Bitfinex have all launched some kind of security tokens. However, these assets are highly regulated in many jurisdictions, which can cause regulatory concerns for exchanges.