Central Bank Of Mexico Releases New Crypto Rules

Girish Chugh

March 13, 2019 4:11 pm

Central Bank of Mexico Releases New Crypto Rules
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The Bank of Mexico, which is also the central bank of Mexico, introduced a circular in the Official Gazette of the Federation on Friday elaborating crypto-related provisions for the regulation of financial technology institutions (ITFs).

The CEO of Mexican crypto exchange Volabit, Tomas Alvarez explained that “A year ago a law to regulate fintech companies was passed by the Mexican Congress. This law stipulates that services that hold custody of users’ fiat currency or cryptocurrencies (most brokers and businesses models require this) have to apply for a license issued by the Mexican equivalent of the SEC (CNBV).”

Further, he elaborated that the same fintech law “tasked the central bank of Mexico (Banco de Mexico) with the responsibility of determining which cryptocurrencies were authorized to be offered to the public by these regulated companies, and gave the Bank of Mexico 12 months to come up with a secondary law to establish same kind of framework or list of authorized cryptocurrencies.”

The CEO added:

“The deadline is due to expire this month so last Friday Bank of Mexico published their secondary laws which essentially stipulated that they wouldn’t authorize any cryptocurrency to be offered by regulated financial companies.”

The Bank of Mexico issued a circular on Friday, stating that “institutions may only enter into transactions with virtual assets that correspond to internal transactions, subject to the prior authorization granted by the Bank of Mexico.”

Alvarez said:

“This is a catch-22 type of situation because, as a Mexican exchange, the law requires you to become a regulated financial institution (otherwise you would be operating illegally). However, once you obtain this license you would not have the authorization to list any cryptocurrencies, making it legally impossible to operate an exchange in Mexico with the Fintech law in place.”

The provisions are open to public consultation until June 5. However, Alvarez noted that “Officially the law is in effect since the moment it was published (last Friday) however it only applies to regulated fintech companies of which none exist yet because the process for becoming a regulated fintech company has been determined yet by CBNV (Mexico’s SEC).”

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