Local cryptocurrency exchange operators in Mexico will now be required to secure a permit from the Bank of Mexico, according to the Diario Oficial de la Federación.
Mexico Aims for Crypto Relevance
The Mexican government is making quick strides to introduce cryptocurrency-specific regulations, presumably to fuel economic growth and to solidify its position as a significant player in the crypto market.
Under the terms of “General Provisions on operations related to electronic payment funds,” cryptocurrency exchanges and related storage providers can provide fiat liquidity to all customers, guaranteed by the Bank of Mexico (Banxico), once a permit is issued.
To ensure acquire a permit, a digital currency business must follow a short procedure to prove its legitimacy and business structure. First, a company must provide a detailed business plan to Banxico–including a description of operations, staff roles and activities, commissions charged-per-trade and procedure for a Know-Your-Customer mandate.
The bank will not provide liquidity to customers on the same day of opening exchange accounts to prevent money laundering and other illicit activities.
Additionally, all entities conducting business are required to prove the legitimacy of all customers and corporations involved in each trade.
Instilling Trust in Cryptocurrencies
With the new laws in place, consumers are set to face slightly increased scrutiny as all assets acquired after cryptocurrency payouts will be subject to validation checked levied by the government.
The permit issuance window is now closed to new crypto businesses. However, applications will open in March 2019 when Mexico’s government issues new fintech regulations for the upcoming financial year.
Creating robust regulations instills investor trust in cryptocurrencies, especially for those waiting on the sidelines for strict government legislation. In this regard, Amir Manzur, founder of local crypto exchange Cubobit, noted the country might witness a digital token boom before the end of 2018. Manzur added:
“The introduction of comprehensive fintech law in March will only strengthen consumer confidence in digital currencies, encouraging people to invest further.”
Cover Photo by david carballar on Unsplash
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