Key facts:
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Services with cryptocurrencies must be offered with authorization, says the Bank of Mexico.
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Banxico’s bans extend to operations with stablecoins.
Through a press release published this June 28, the Bank of Mexico (Banxico), together with the ministry of Finance and the comision Nacional Bancaria y de valores (CNBV), recalled that in the country, there are regulations that prohibit financial institutions operate with bitcoin and other criptomonedas.
In a four-page brief, financial authorities point out that virtual assets they do not constitute an official currency nor are they currencies, under the legal framework in force in that nation.
Consequently, ” financial institutions that carry out and offer operations with so-called ‘virtual assets’ without authorization would be in violation of the regulations and will be subject to sanctions.”
The country’s financial institutions are not authorized to conduct and offer to the public transactions with virtual assets such as Bitcoin, Ether, XRP and others, in order to maintain a healthy distance between these and the financial system. Those who issue or offer such instruments will be responsible for the violations of the regulations that this causes.
Banxico, Hacienda and CNBV press release.
In the text, the Mexican financial authorities indicate that the previous assertions correspond to warnings issued in 2014, 2017 and 2019, related to the risks inherent in the use of cryptoassets as a means of exchange, as a deposit of value or as another form of investment.
It is also said that in Mexico banks have not been authorized to offer balance management services denominated in pesos or foreign currency, derived from the collection of resources through technological schemes related to blockchains.
“Institutions must have prior authorization from the Bank of Mexico to carry out internal operations with virtual assets (…) In addition, they must prevent at all times that the risk of such operations is transmitted, directly or indirectly, to their customers”, as explained.
In the statement, the agencies extend their prohibitions to the operations performed with anchored coins or stablecoins, which serve as mediators between fiat money and cryptocurrencies by having (mostly) 1:1 backing with the dollar. To offer services with this type of cryptocurrency, banks “must also have the authorization of law,” Banxico says.
“Bitcoin is not money,” says Treasury Secretary
On this issue of operations with cryptocurrencies, Treasury Secretary Arturo Herrera also expressed himself, who reiterated in a press conference that this not a new position of the Mexican financial authorities, as it has been made public on previous occasions.
For the official, cryptocurrencies are built on innovative elements that must be adopted in the financial system, which prevents them from being classified as money.
“Clearly cryptocurrencies are not reserves of value. Bitcoin is an asset that is considered speculative, and because of its variations (volatility) it is not a means of exchange. In addition, it is associated with illegal operations, and to be completely frank there is no traceability,” Herrera said.
These are the same arguments that have been maintained for years by most regulators who reject bitcoin; even though there are investigations that show that the relationship between cryptocurrencies and financial crimes is not so strong, as has been outlined in several articles of this medium.
The statement slows down the wishes of Banco Azteca
The Mexican financial authorities ‘ document is released just one day after Ricardo Salinas Pliego, owner of grupo Salinas and owner of Banco Azteca, he will express his sympathies for bitcoin and cryptocurrencies on Twitter.
As reported by CriptoNoticias, the entrepreneur said yesterday that his entity was working “to bring cryptocurrencies to customers and continue to promote freedom,” while holding an open dialogue with bitcoiner Michael Saylor, CEO of MicroStrategy.
All these statements were made in a context in which Mexico ranks high, since the recent rise that the Financial Action Task Force (FATF) has granted to the country in terms of cryptocurrency regulation.
The Aztec nation went from being an “obedient” country to “broadly obedient” according to the body, thanks to the “outstanding” implementation of 22 of the FATF’s 40 guidelines on virtual assets and service providers.