Mexico’s central bank has recently proposed new regulations to a recently enacted fintech law that could “effusively ban cryptocurrency exchanges in the country” if they manage to move forward.
According to non-profit cryptocurrency research and advocacy firm Coin Center, the country’s central bank would see cryptocurrency exchanges dealing with fiat currencies in the country lose access to the local banking system through the new law, while being able to claim it isn’t banning exchanges.
Per the group, the fintech law was supposed to open Mexico for innovation by allowing crypto exchanges to operate, while helping them become regulated institutions in the country. The changes being applied to it would stop financial institutions from offering exchanges transmission or custody services.
The proposal, according to Coin Center, deems cryptocurrencies too complex for average users over the “mathematical and cryptographic processes that underlie digital assets.” It adds that their complexity coupled with their volatility presents a problem that has to be addressed by “quarantining consumers from direct contact with crypto,” as Coin Center puts it.
Addressing the central bank’s reasoning, Coin Center claims the average person also doesn’t understand how a car works, but that these aren’t banned throughout the country. Its post reads:
An approach of “protecting” consumers by eliminating regulated exchanges is no different than failing to promulgate automobile safety standards for car manufacturers and instead prohibiting people from buying cars in the first place and allowing only buses on the roads.
The cryptocurrency advocacy firm further argues that imposing a blanket ban on cryptocurrency exchanges in the country will only force consumers to turn to use exchanges based in other jurisdictions.
These, it notes, could be “sensibly regulated by more forward-looking governments,” or they could be “rogue operations that deliberately evade any regulatory jurisdiction.” The central bank’s move, it claims, is only pushing Mexican cryptocurrency enthusiasts into underground markets that may not be as safe as regulated ones.
Coin Center adds that there’s a 60-day period in which the public can comment on the proposal. The group itself revealed it plans on commenting on it, and hopes “others will as well and help explain to the central bank why its approach would not only make it an outlier among industrialized nations, but would hurt the consumers it is trying to protect as well.”
As CryptoGlobe covered, crypto exchange Kraken has last year raised $3 million to support Coin Center’s cause.