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Fintech Market Overview

This article does not constitute legal advice.

Cryptocurrencies in Mexico

Fintech Software

Mexico's approach to regulating cryptocurrencies can be both highly technical and yet still lack clear-cut answers to relevant aspects of digital technology.1

Blockchain, as a technology, is not regulated in any manner. There are no references to decentralised ledgers or other characteristics of the technology itself; instead, the regulatory focus has been placed on 'virtual assets', a rather limited concept, defined as 'a representation of value that is recorded electronically and used among the public as a payment method for any kind of legal transaction and which can be transferred exclusively through electronic means'. As this description is clearly based on the characteristics of cryptocurrencies in general, it currently fails to encompass the more modern application of blockchain technology, most notably, non-fungible tokens.1

The regulation of virtual assets has been assigned to Banxico. Although the Fintech Law introduced several models to allow an institutional approach to virtual assets, on 30 September 2020 Banxico issued restrictive regulations limiting all virtual asset activities by financial entities to internal activities that require prior approval from Banxico. This approach has been, for the most part, aimed at allowing the use of virtual assets by the general public, but limiting adoption and use by financial institutions. Banxico, through non-binding opinions, has expressly stated that 'notwithstanding the fact that regulations have limited ITFs and banks from offering users virtual assets services, the regulations do not limit commercial companies to offer services related to virtual assets'. Private parties could, for example, price services rendered to each other in virtual assets; or crypto exchanges could be incorporated without needing the authorisation of any regulator (provided that these parties do not operate a fiat gateway to avoid triggering a restriction on the collection of deposits, and that they only buy and sell virtual assets on their own behalf and do not serve as a virtual asset marketplace).2

Virtual currencies in Mexico

Fintech in Mexico

Fintech in other countries

Notes
  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/mexico
  2. http://www.banxico.org.mx/sistemas-de-pago/6--acciones-regulatorias-po.html
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