Bank of Mexico, the central bank of the country has recently issued a new set of rules for crypto assets which are creating a stir in the crypto market. As per the CEO of one local crypto exchange, the impact these new sets of rules would be beyond the crypto space. He called it a disaster and expressed his disappointment by saying that the people of the central bank have shown a great deal of ignorance towards this new form of currency.
After the disclosure of circular having provisions for the financial technology institutions, many people in the finance sector had put their views. The CEO of Isbit, (which is a native crypto exchange) said that “FTIs have to prevent consumers from being ‘exposed’ to the terrible ‘dangerous’ nature of virtual assets on the grounds of their ‘volatility’ and ‘complexity.’”. “In a way, it [Banxico’s circular] is preventing institutions from offering virtual assets to end consumers,” he said.
Last year in the month of March, Congress of Mexico passed a law regulating fintech companies. It decided that Banxico would be the in charge and will determine which cryptocurrencies to authorize by regulated entities to allow them to present their offerings to the public. Since this news, Mexican and worldwide investors and crypto communities were hoping something positive from the government which would help in boosting the country’s economy too.
The CEO of another local exchange named Volabit said that when Banxico published the circular, it was clear to all that it would not allow any cryptocurrency to get offered by regulated financial companies.
However, one local crypto exchange named Bitso has a different perspective to look at this news. The exchange clears that the issued circular is aimed at fintech and banks. The aim is to regulate the crypto related operations of these entities. It also brings to the notice that Banxico has mentioned that it wants to benefit from this technology, but it would be done only within the boundaries; it would be used for internal operations of financial institutions only. Which means the circulation would be restricting the operations but not stopping them totally.
Bitso’s CEO calls it a catch-22 situation as the legal authorities of the country are wishing to make crypto exchanges regulated financial institutions. He noted,
“However, once you obtain this license you would not have the authorization to list any cryptocurrencies, making it legally impossible to operate an exchange in Mexico with the fintech law in place.”
As the new circular is appeared to be passed in a hurry without paying enough attention to the details, it leaves many crucial things to the understanding of each individual.
The Isbit CEO thinks that the new circular by the Mexican central bank on crypto asset would negatively impact the country’s economy. He explained saying
“Mexico is the endpoint to the biggest remittance corridor in the world (second largest population of migrants), the 6th most visited country by tourists and [is the] country with the largest number of free trade agreements.”
Hence the economy of the country is largely earning from the industrial application of virtual assets by using them to enable free trade, tourism, and financial inclusion.