It is the second agreement reached by the Salvadoran company specializing in the tokenization of financial products, real assets and blockchain technology.
MIO3 of El Salvador and StegX of Germany, companies specialized in the tokenization of financial products, real assets and blockchain technology, met in Frankfurt to sign a Strategic Partnership Agreement, marking the first such agreement between regulated suppliers in the digital asset and financial products sector between El Salvador and Europe.
This agreement opens up new investment opportunities, allowing StegX customers in Europe to access investments in digital assets token by MIO3 in Latin America, establishing a bridge between the two regions for the flow of capital.
The signing of the agreement was attended by Julio Valdés, CEO of MIO3; Felipe Nuila, CTO of MIO3; Sergio Quiñónez, Finance Manager of MIO3; as well as Daniel Radwansky and Marcos Joos, founders of StegX.
Representatives of StegX and MIO3 in Frankfurt. Photo EDH/ Courtesy
“This transcontinental agreement reinforces our commitment to expand access to capital for investment in tokenized assets and marks an important phase for MIO3 as it creates a structure that opens the doors of Europe… We are excited to collaborate with StegX to provide customers of both platforms with new token products in Europe and Latin America, taking advantage of new opportunities for growth and expansion by connecting both markets,” said Julio Valdés, CEO of MIO3.
Daniel Radwansky, founder of StegX, said: “Our partnership with MIO3 marks the beginning of a new stage for the market for tokenised assets with two players in Europe and Latin America joining forces to allow cross-border business cases. Through this collaboration, we will be able to take advantage of our extensive network, facilitating a wider reach for our clients’ tokenized assets and a greater impact on the European and Latin American investment landscape.”
This agreement not only establishes a strategic channel for investment in digital assets between El Salvador and Germany, but also creates a robust legal and technological path that improves access to capital and investment.
With this second transcontinental agreement, El Salvador, through MIO3, is positioned as an entry point for the new and growing global tokenized capital market.
Following MIO3’s first transcontinental partnership with Hydra X in Singapore in June 2024, this agreement with a European company consolidates the company’s appeal to international investors.
The COO Ng Wee Hao of Hydra X and CEO Julio Valdes of MIO3 sign a collaboration agreement between Hydra X and MIO3, accompanied by Felipe Nuila and Mark Tang. Photo Courtesy/ Courtesy MIO3
The “tokenized” concept
What does it mean that a project has been tokenized? That is based on blockchain, that unmodifiable and shared ledger that facilitates the process of recording transactions and asset tracking. This chain, for example, is registered Bitcoin, a legal tender currency in El Salvador. Thousands of computers are connected to the blockchain, which verify transactions made anywhere in the world.
The interesting thing about this is that blockchain is not only for cryptocurrencies, but that all kinds of documents can be created there. In this case, it is a digital asset that is tied to the property rights of a property. To understand it in simpler terms, it is the creation of a kind of digital writing that certifies that someone possesses that asset.
“Blockchain is a publicly distributed database that everyone can see, but cannot be modified. I can’t change a piece in the past, because it affects everything, the chain cuts and collapses. You can go see the asset, the originator, with the certainty that it is authentic. I don’t say ‘trust my token’, but it is supported by a whole global community,” explains Felipe Nuila, director of technology at MIO3, to explain why a document originating in blockchain always enjoys reliability.
The benefits given by the tool can be inscribed in two types: financing and prosecutors.
The first are the most interesting, as explained by the CEO of MIO3. And there are many types of tokenization. One of them is the debt company, which was the one applied by Burgo de Osma to obtain financing for the construction of a winery project in the country.
MIO3 created for this real estate developer a digital asset tied to the land where these properties were built. This was placed on the market to be able to attract funds from interested investors around the world. In fact, that is the main advantage of using tokenization: that a person or company can, de facto, come into contact with financiers across the globe, not just in El Salvador or the region.
The wineries of the Burgo de Osma company take the privilege of being the first successful tokenized project in the country. This is a project render. Photo EDH/File.
According to lawyer Julio Valdés, in this case they were two investment funds (formed by companies that have a large number of products in a single bag) of great prestige internationally. Thus, it is no longer necessary to go to a bank or financial institution to obtain funds.
“In a traditional transaction, the debt is inscribed in a repaid, on a paper, that is stored in a cellar. What is done here is to do it in the blockchain, which is a digital record,” Valdés says.
One thing to clarify is that the MIO3 company is not in charge of any activity of the project itself, such as the maintenance of facilities or the payment of the staff, but does so by the developer, who completes the project and delivers it to the market, that is, to the buyer customers.
Tax advantages
According to experts, blockchain allows entry to a global stock market, where you can get fresh money and liquidity for the country with the attraction of funds from all over the world.
But there is also another advantage for those who decide to get on the ship of digital assets: the tax exemption from this item in El Salvador.
In a traditional real estate business, for example, 30 per cent of the profits in the Income Tax (ISR) or 5 % of Value Added Tax (VAT), which does not happen in a business based on digital assets, allowed in the country.
“In the case of legal persons, the tax benefits indicated above shall apply to both the entity, as well as to the individual partners or shareholders concerned, in respect of profits or dividends from the activities detailed above,” says the Digital Assets Act.
This article has been translated after first appearing El Salvador