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.

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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.

Casey Munden