Fintech Market Overview

This article does not constitute legal advice.

Digital assets in Mexico

Fintech Software

While digital marketplace activities are not regulated, activities within marketplaces facilitating the sale and purchase of virtual assets are regulated, and provide an institutional fiat gateway for individuals in Mexico interested in holding virtual assets, as further described in subsection iii.1

A particular aspect where the current legal framework has been mute is the use of virtual assets as securities. Initially, securities in Mexico were regulated by the Securities Market Law, which defines a security as:

"the shares, obligations, bonds, optional titles, certificates, promissory notes, letters of exchange and other named or unnamed negotiable instruments, whether recorded or not in a registry, susceptible to circulation in securities markets, issued in series or in mass and that represent the stock of a company, a part of an asset or the participation in a collective credit or any individual right, in terms of applicable local or foreign laws."1

While this would give the impression that virtual assets could, in some cases, serve as securities, Banxico holds the (non-binding) opinion that any virtual asset representative of an underlying asset (shares, bonds, etc.) is not really a virtual asset (without clarifying what the digital value representation would be). While this definition is different to the one provided by the Fintech Law, it sheds light on the opinion Mexican regulators hold on the use of virtual assets as tradeable securities.2

From an anti-money laundering/counter-terrorist financing perspective, in early 2018 the Mexican Federal Law to Prevent and Identify Operations with Illicit Resources was amended to specifically foresee certain cases in which operations with virtual assets could be considered vulnerable activities, and thus subject to notices to Mexican authorities. This amendment was heavily based on international standards; in particular, the Financial Action Task Force's Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers.1

Finally, it is worth noting that, from a tax standpoint, virtual assets are seen by the Mexican tax authorities as no different to other assets; therefore, any sale of digital assets would be subject to the same general income tax and value added tax provisions of other moveable assets.3

Smart contracts in Mexico

Fintech in Mexico

Fintech in other countries

  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/mexico
  2. http://www.banxico.org.mx/sistemas-de-pago/1---que-es-un-activo-virtua.html
  3. http://www.prodecon.gob.mx/Documentos/bannerPrincipal/2021/CRIPTOMONEDAS.pdf
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