During a livestreamed conversation between Bitfinex Chief Technical Officer Paolo Ardoino and Blockstream CEO Adam Back, Ardoino argued that the Bitcoin industry should prioritize jurisdictions that support it. The discussion centered around the potential impact of securities tokenization on the financial world.
Both speakers agreed that securities tokenization could have a profound effect, including raising user expectations. Ardoino highlighted the challenges faced by banks due to their reliance on outdated messaging and settlement technology, which hampers speed and interoperability. In contrast, tokenization offers the advantages of Bitcoin to a wider audience.
Back emphasized that tokenization would lead to cost reduction, enabling small businesses to enter the market. He also mentioned the positive implications for tax reporting and inheritance planning through Bitcoin exchange-traded funds (ETFs). Furthermore, Back suggested that tokenization could result in innovations such as BTC mortgages, making it easier for individuals with nontraditional employment to purchase homes.
Ardoino stated that the crypto industry would likely experience a shift in investor attention from “useless tokens” to more reliable financial products like BTC ETFs. This change could have a significant impact on the industry.
Back also mentioned that Blockstream Mining Notes, which offer exposure to BTC mining, would mature in the summer. These notes are securitized under Luxembourg law.
Bitfinex Securities, licensed in Kazakhstan’s Astana International Financial Centre (AIFC) economic zone and El Salvador, was also mentioned during the discussion. Bitfinex Head of Operations Jesse Knutson noted that these jurisdictions may raise eyebrows among investors and issuers, as they are not commonly associated with global capital markets. Ardoino responded by expressing his disappointment in the declining trajectory of London, Frankfurt, and other global financial centers since the 2008 financial crisis.
In 2021, Bitfinex Securities launched in the AIFC and expanded to El Salvador at the end of January. The company issued a Tether (USDT) denominated bond on Blockstream’s Liquid Network in October, initially receiving limited enthusiasm. The Liquid Network operates as a BTC layer 2 protocol.
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