Mexico cannot follow El Salvador’s example of Bitcoin …
The authorities behind financial regulation in Mexico have warned financial institutions handling cryptocurrencies, stating that digital assets are still not legal tender in the country.
During a press conference on Monday, officials from Mexico’s Treasury Department, the Bank of Mexico and the National Banking and Securities Commission issued a joint statement warning virtual asset investors not to take risks as a means of barter and store of value. They added that any Mexico-based financial institution “must not conduct or provide public activities involving virtual assets,” particularly with respect to Bitcoin (BTC), Ether (ETH) and XRP.
The country’s central bank and financial regulators appear to be targeting Ricardo Salinas Pliego in the context of his recent Bitcoin announcement. The third richest person in Mexico said Sunday that he is examining the possibility that his bank, Banco Azteca, will accept Bitcoin to encourage widespread adoption.
However, Finance Minister Arturo Herrera said that Mexico’s financial systems are banned from using cryptocurrencies, a policy that is unlikely to change in the near future. Authorities added that they will monitor the evolution of the cryptocurrency as well as the potential uses of the underlying technology, but will continue to view the digital asset as volatile, speculative and a less efficient medium of exchange than fiat money.
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While Mexico has what appears to be a strong anti-crypto stance, its neighbors have done the opposite by promoting cryptocurrency as a valid currency and encouraging companies to accept Bitcoin. Earlier this month, El Salvador passed a law stating that Bitcoin will be accepted as legal tender, while Paraguayan Congressman Carlos Rejala said he would introduce a similar bill in his country’s parliament on July 14.
Although at least two lawmakers in Mexico pushed a proposed regulatory framework for cryptocurrencies in the wake of El Salvador’s move, Monday’s financial regulators’ announcements suggest that some authorities are still hesitant on the idea. Last year, the head of Mexico’s Treasury Department’s Financial Intelligence Unit reported that gangs had increased the use of cryptocurrencies for money laundering and said the country’s law enforcement agencies lack the resources to combat money laundering related to cryptocurrencies.