According to a circular published in the official newspaper of the Mexican government on 10th September, banks delivering crypto-related services and crypto exchanges are now required to obtain permits from the Bank of Mexico (Banxico).
The letter explains that the new rules were in line with Mexican laws pertaining to the regulation of financial technology institutions. The goal is to allow growth and innovation in the sector while preventing the associated risks.
In order to continue promoting the proper functioning of payment systems and the sound development of the financial system, as well as the protection of public interests, it is convenient to establish a regulatory framework that, on the one hand, allow the development of innovation in the payment services of the country, in such a way that the benefits of the efficiency that the electronic payment funds institutions can contribute to the provision of payment services are exploited and, at the same time, it establishes conditions adequate to mitigate the risks associated with such services.
The document, which was directed at institutions engaged in the transfer of electronic funds and titled, “General provisions for operations related to electronic payment funds”, clearly spelled out the requirements businesses engaged in cryptocurrency activities have to meet.
Companies seeking the permit will have to provide a comprehensive business plan describing their operations, the fees they will be charging for their services and how they intend to go about meeting Know-Your-Customer (KYC) laws.
Specific regulations aimed at limiting money laundering and other illegal activities were also included in the circular. For example, customers of banks are not to be allowed to make crypto purchases on the same day their accounts are created. The KYC rules also require banks and crypto exchanges to identify all clients who perform cryptocurrency transactions. Furthermore, extra verifications have to be done when transferring crypto assets to beneficiaries.
The Cryptonoticias, a Mexican cryptocurrency news website, reported that the institutions affected by the new regulations were given the choices of applying by 11th September or in March 2019 after new fintech laws were passed.
The step taken by Mexican government ndicate that it is following the lead of the U.S, EU, Japan, and South Korea in studying the crypto landscape to produce regulations that are aimed at allowing innovation while limiting illegal activity.