Mexican "FinTech Law" Will Legitimize Crypto in Banks, on Payment Platforms

Mexican Periodical El Universal recently reported that the latest draft of a bill currently being passed through the Mexican senate includes provisions to develop a legal framework that will allow Mexican banks to store Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

The bill, which is entitled the “Law Regulating the Financial Technology Institutions”, colloquially known as the “Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term Law”, has also been expanded to provide a framework for electronic payment-processing companies (ie PayPal) to process cryptocurrency transactions.

Additionally, the bill grants new permissions to the CNBV (Comisión Nacional Bancaria y de Valores) financial regulator that will allow new regulations to be put in place in tandem with the creation of new financial technologies. “This is because non-traditional financial institutions can develop products and services that didn't exist when the law was passed,” explained CEO of Prestadero, Gerardo Obregón, to BNAmericas.

If new regulations are passed through Congress (the traditional way), they can take up to three years to pass - a timeline that would critically impair Mexico’s ability to keep up with the global pace of innovation in financial technology.

Mexico Acknowledges the Need to Foster Innovation

The FinTech Law has been circulating through the Mexican legal system since spring of this year; previous drafts included language that clarified Mexico’s stance on the legal status on cryptocurrencies. In the September draft of the bill, cryptocurrencies did not have a standing as legal tender in Mexico. Firms wishing to deal in cryptocurrencies required “the prior authorization of the Bank of Mexico.”

The legislation currently outlined in the bill proposes stricter regulations for banks than Non-Banking Financial Companies (NBFC). El Universal reported that the language of the draft acknowledged the need for regulation “that allows authorities to mitigate risks and allow for growth in a competitive environment.”

Adam Reese of ETHnews reported that based on the provisions of the latest draft, “it seems feasible that customer-owned digital assets in the possession of regulated institutions will be visible to some government entities.”

While Mexico is not exactly known as an international hotspot for cryptocurrencies, it hasn’t exactly been a crypto desert either. Mexican exchanges Bitso and Volabit have been operating successfully in the country since 2014; the innovative language of the new law may be just the right thing to get the crypto ball really rolling in the country.