Mexico outlines new laws for crypto exchanges
Mexico’s central bank has announced that cryptocurrency exchanges and banks offering crypto-related services in the country will be required to apply to it for a permit to operate
In a circular published earlier this week, the Bank of Mexico, aka Banxia, said that it established a regulatory framework for the crypto industry to mitigate the risks associated with its services.
Under the terms of “General Provisions on operations related to electronic payment funds,” crypto exchanges and related storage providers can provide fiat liquidity to all customers, guaranteed by Banxico once a permit is issued.
To acquire a licence, a digital currency business must follow a short procedure to prove its legitimacy and business structure. This includes submitting a detailed business plan to Banxico, including a description of operations, staff roles and activities, commissions charged per trade and procedure for a know-your-customer (KYC) mandate.
The bank will not provide liquidity to customers on the same day of opening exchange accounts to prevent money laundering and other illicit activities.
“The Bank of Mexico seeks to continue promoting the protection of the interests of users by establishing adequate conditions for the development of a competitive environment in the payment services market, as well as the proper functioning of the systems of payments, the healthy development of the financial system and the promotion of electronic payment funds institutions,” Banxico stated.
Amir Manzur, founding partner of Mexican crypto exchange Cubobit, said the new framework would encourage more people to use crypto-related services.“Mexico will experience a cryptocurrency boom at the end of the year, due to the boost provided by the FinTech Law,” he predicted.
The permit issuance window is now closed to new crypto businesses, but will reopen in March 2019 when Mexico’s government issues new fintech regulations for the upcoming financial year