Mexico Becomes Latest Country to Regulate Cryptocurrency
Mexico’s Congress has approved new legislation that will govern the country’s fin-tech sector, with special provisions that address cryptocurrencies and crowdfunding. In doing so, Mexico joins a small group of nations to adopt proactive measures to regulate digital assets.
Fin-Tech Bill Passes Final Hurdle
On Thursday, lawmakers in Mexico’s lower Congress approved new regulations targeting financial technology. The bill, which has the dual mandate of promoting financial stability and cracking down on money laundering, includes measures that will give cryptocurrencies room to grow in the world’s 16th largest economy.
The bill was approved by the Senate in December before making its way to the lower house for a vote. The next and final step is official sign-off from President Enrique Pena Nieto.
While significant, the bill itself provides only broad guidance on how fin-tech and cryptocurrency ought to be regulated. According to CCN, lawmakers are expected to draft “secondary laws” targeting cryptocurrency-related business.
CCN first caught wind of Mexico’s plan to regulate cryptocurrency as far back as September. It correctly predicted that new crypto-related legislation would not deal with specifics, but instead allow government to adopt a broad regulatory approach to the digital asset class.
The new laws allow Mexico’s financial institutions to participate in “open banking,” or the free flow of information via public application programming interfaces (API). This will allow financial institutions to improve services and access to banking while reducing costs, according to Francisco Mere, the head of Fintech Mexico.
“Open banking recognizes that the information in the hands of the financial institutions is the property of the user, not the institution’s, and that it can be brought to other financial intermediaries,” Mere said, as quoted by Reuters.
The bill gives the Bank of Mexico sweeping powers to decide which fin-tech institution can utilize cryptocurrency. This essentially means central bankers will decide which coins are allowed to list on exchanges. The exchanges themselves will have up to one year to comply.
Although not considered a major center for cryptocurrency, Mexico’s relatively liberal approach to regulation could help the country attract foreign investment. It can also strengthen cryptocurrency adoption and possibly create more favorable conditions for companies to launch their ICOs.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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