The government of Mexico has published provisions regarding cryptocurrency. The Bank of Mexico will decide which cryptocurrencies are legal and fintech companies must gain approval from the central bank to operate in the crypto space.
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Fintech Law Applies to Crypto
The Mexican government published a circular containing new legislation for the fintech industry on September 10 in the official gazette of the federation. It includes provisions for cryptocurrencies.
According to the president of the National Banking and Securities Commission (CNBV), Bernado Gonzalez, “The fintech law is meant to regulate financial and technological institutions in Mexico, making it the first country in Latin America to establish a legal framework for this type of company,” El Universal reported. Gonzalez explained that “the rules would apply to crowdfunding companies, online payments, and cryptocurrencies.”
The document states that companies wanting to carry out transactions involving cryptocurrencies “must request authorization from the Bank of Mexico so that they can use those technologies associated with any of the virtual assets” approved by the bank.
La Verdad elaborated:
The Bank of Mexico (Banxico) reported that as of this Tuesday, September 11, financial institutions that are interested in offering ‘financial technology services with virtual currencies and foreign currency operations’ may send their request specifying the commissions that will be charged to the public.
The news outlet opined, “In other words, a green light is given for the exchange of cryptocurrencies for cash.”
Gonzalez detailed that this regulation “opens up the possibility for small and medium-sized companies to obtain financing from the public through collective funding platforms…without having to go to a traditional credit institution…the rates offered today are much lower than in other financial intermediaries,” Televisa quoted him. The publication further noted that “The authority expects 73 fintech companies to apply for registration.”
Central Bank Is in Charge
Companies may only handle the cryptocurrencies that the Bank of Mexico determines to be appropriate, the circular explains. However, the central bank has yet to announce which cryptocurrencies are legal.
Noting that the fintech law defines cryptocurrencies as “virtual assets,” Gonzalez reiterated that “the Bank of Mexico will establish which ones may be used in Mexico and which fintech or banks may carry out transactions with them,” El Universal conveyed. Criptonoticias elaborated:
Banxico will determine what type of crypto assets…can be traded through this class of operators. The institution will be responsible for granting or denying the corresponding permits. Companies must comply fully with the country’s legislative body in order to obtain this permit.
The aforementioned fintech provisions “indirectly affect the management of virtual assets,” the publication noted, adding that “the general provisions for cryptocurrencies” are expected to be published before March 10, 2019.
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