This June 28, the Bank of Mexico (Banxico) reaffirmed to banking entities that they are prohibited from carrying out operations with virtual assets, from cryptocurrencies such as bitcoin, and even the so-called “stablecoins”. The information was shared through a document posted on their website.
The Mexican central bank, in conjunction with the National Securities Banking Commission (CNBV) and the Ministry of Finance and Public Credit (SHCP), published a four-page document about the possible risks of virtual assets. There, he reminded Mexican banks that they are prohibited from carrying out operations with bitcoin (BTC) and other cryptocurrencies and virtual assets in general:
“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. Those who issue or offer said instruments will be responsible for the infractions to the regulations that this causes and will be subject to the applicable sanctions”.Banco de México (Banxico), National Banking Securities Commission (CNBV) and Ministry of Finance and Public Credit (SHCP).
The statement begins by stating that virtual assets “do not constitute legal tender in Mexico nor are they foreign currency under the current legal framework.” This recent notice from the Mexican central bank is reiterative about “the warnings issued in 2014, 2017 and 2019 on the risks inherent in the use of so-called“ virtual assets ”as a medium of exchange as a store of value or as a form of investment”, exposed the financial authorities of Mexico.
Mexican authorities highlighted a ban on so-called “stablecoins”
Banxico, CNBV and SHCP highlighted the issue of so-called “stablecoins” or tokens anchored to fiat currencies or commodities, pointing out that such virtual assets related to balance management services denominated in Mexican pesos do not have the authorization of the regulatory entities of said country, and that offering commercial operations with such assets is subject to sanctions:
“In Mexico, the offer of the balance management service denominated in pesos or derivative currencies has not been authorized to attract resources through deposits from the general public, through technological schemes related to block chains or distributed registries, called” stablecoins ”(in English, stablecoins). Financial institutions that carry out and offer operations with so-called “virtual assets” without an authorization would be in breach of the regulations and will be subject to the applicable sanctions”.Bancon de México (Banxico), the National Securities Banking Commission (CNBV) and the Ministry of Finance and Public Credit (SHCP).
Banxico, CNBV and SHCP added that “as long as the corresponding authorizations are not available, any individual or legal entity is not allowed to raise resources through the issuance or offer in the national territory of the instruments called” stable currencies “with the described characteristics”. Therefore, those who do so without authorization “will be responsible for the infractions of the regulations that this causes and will be subject to applicable sanctions”.
The Mexican authorities indicated that financial technology institutions that want to carry out operations with virtual assets must have prior authorization from Banxico, to carry out the operations described in its provisions; they also indicated that “they will be prohibited from carrying out operations with said assets in terms other than those established in the respective authorization”.