Mexico’s Finance Minister: Cryptocurrencies Are Prohibited From Being Used in Financial System

Mexico’s Finance Minister: Cryptocurrencies Are Prohibited From Being Used in Financial System

Mexico’s central bank, finance ministry, and banking regulator have jointly issued a warning about cryptocurrency. Finance Minister Arturo Herrera emphasized that cryptocurrencies are prohibited from being used in Mexico’s financial system.

• The central bank of Mexico, the finance secretary, and the National Banking and Securities Commission (CNBV) said in a joint statement Monday that crypto assets are not legal tender in Mexico and are not considered currencies under current laws.
• The regulators warned that financial institutions operating with them are subject to sanctions.
• Their statement reads: “The financial authorities reiterate their warnings … on the risks inherent in the use of so-called ‘virtual assets’ as a means of exchange, as a store of value or as another form of investment.” It adds:

The country’s financial institutions are not authorized to carry out and offer to the public operations with virtual assets, such as bitcoin, ether, XRP and others in order to maintain a healthy distance between them and the financial system.

• The statement also warns that cryptocurrencies tend to be volatile and speculative assets, noting that they do not serve the same function as money, “since their acceptance as a means of payment is limited and they are not a good reserve or value reference.”
• In addition, the use of stablecoins is not permitted under current Mexican law.

• At a news conference Monday, Reuters reported Mexico’s finance minister, Arturo Herrera, as saying:

Under current rules cryptocurrencies are prohibited from being used in the Mexican financial system, underscoring that the prohibition will likely not change in the near term.

• The authorities’ statements came after Mexican billionaire Ricardo Salinas Pliego said Sunday: “I recommend the use of bitcoin, and me and my bank are working to be the first bank in Mexico to accept bitcoin.”
• Luis Gonzali, co-director at Franklin Templeton Investments in Mexico, believes that the regulators’ statement was “a reaction to the comments [of] Salinas Pliego,” noting that “It’s a way of saying his bank can’t accept bitcoins even though he wants to … it’s a way of putting a stop to him.”

What do you think about Mexico’s approach to cryptocurrency regulation? Let us know in the comments section below.