Finance

Bank of Mexico Introduces Stricter Laws for Crypto Exchanges

A new official circular released in Mexico on September 10 has made it mandatory for the institutions and services dealing with cryptocurrency to obtain a permit from the Bank of Mexico (Banxico) before beginning their operations.

The circular was published in the Diario Oficial de la Federacion, which is the official daily of the government of Mexico.

How Can Companies Get the Permit?

The publication is titled as ‘General provisions on operations related to electronic payment funds’ and explains that the crypto related permits will only be released by the Bank of Mexico.

To get a permit, the respective cryptocurrency-related company is required to provide a detailed business plan with an in-depth description of their operations along with the mechanism that they would use to verify the customer identity, commissions they are going to charge and other specific details.

The businesses were required to submit their permit applications by September 11, and the permit window issuance is now closed, according to Criptonoticias. However, it will open again in March 2019 when some new fintech laws are expected to be passed.

Strict Regulations to Prevent Illicit Activities

The circular has made it clear that banks are not allowed to issue cryptocurrencies to the users if their accounts were created on the same day. Additionally, it also instructs the financial entities to identify all the parties involved in crypto trading on a KYC (Know-your-customers) basis.

On the same lines, to prevent any illicit and money laundering activities, an asset produced by crypto traders would go through strict validation checks.

Bank of Mexico has always been concerned about the advent of cryptocurrencies. Previously, in 2017, the governor of the Banxico, Agustin Carstens, said that until and unless a government or bank recognizes cryptos such as Bitcoin, they do not meet the ideal definition of currency.

Cryptocurrency Boom in the Country

In spite of the stricter rules and regulations in place, Amir Manzu, the founder of Cubobit, a local crypto exchange, feels that Mexico is all set to witness a huge cryptocurrency boom by the 2018 end.

Manzur told Forbes that: “The introduction of comprehensive fintech law in March will only strengthen consumer confidence in digital currencies, encouraging people to invest further.”

Well, we hope the same too!

Related post:

Is Bitcoin the Answer to Argentina’s Crisis?

Nikita Mittal

An avid technical writer with more than 8 years of experience, Nikita is an engineer by profession and writer by passion. She writes all things about the cryptocurrency and blockchain.

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