The Bank of Mexico details cryptocurrency guidance.   Banxico, the country’s central bank, published its crypto-related provisions for regulation of financial technology institutions (ITFs) in the Official Gazette of the Federation.   

Tomas Alvarez, the CEO of Volabit, a Mexican crypto exchange, 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 money or cryptocurrencies (most brokers and exchange business models require this) have to apply for a license issued by the Mexican equivalent of the SEC (CNBV).”

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

The CEO added:

“The deadline was 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 guidance published on Friday states 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.” In addition, the provisions specify that “They will not be eligible for obtaining the authorization” to directly provide their clients with cryptocurrency exchange, transmission or custody services.

The provisions in the guidance are subject to public consultation – the deadline for the public consultation is June 5th. Alvarez commented saying:

“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 not been determined yet by CNBV (Mexico’s SEC).”

What do you think?   Will we continue to see these catch 22’s for cryptocurrency by central banks?   Let us know what you think on our Facebook Page! 

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