March 18, 2019, | AtoZ Markets – Regulating the cryptocurrency in Mexico seems to be more of a “disaster” than a solution, as a CEO of a local crypto exchange commented on the regulatory labels on digital assets the Central Bank of Mexico has recently published.
Sebastian Acosta Checa, the CEO of the local crypto exchange Isbit, further described the bank officials who worked on the labels as “ignorant”, asserting they “have really shown their ignorance” about cryptocurrency.
The Bank of Mexico (Banxico) has recently published a circular outlining digital assets’ provisions for the regulation of financial technology institutions (FTIs).
Checa reflected his concerns as the circular says “FTIs have to prevent consumers from being ‘exposed’ to the terrible ‘dangerous’ nature of virtual assets on the grounds of their ‘volatility’ and ‘complexity.’”, which he sees it prevents institutions “from offering virtual assets to end consumers,”, as per him.
The country’s congress had passed in March last year, a law to regulate fintech companies, which dictated that Banxico is in charge of determining which cryptocurrencies could be offered to the public.
Mexico crypto regulation blasted the community’s hope
The law triggered a wave of careful anticipation at the time among the cryptocurrency community and stakeholders, which hoped that the central bank would introduce positive regulations to foster the fintech sector and the country’s economy in general.
On his turn, Tomas Alvarez, CEO of local crypto exchange Volabit, commented on the newly-issued law, saying that “it essentially stipulated that they wouldn’t authorize any cryptocurrency to be offered by regulated financial companies,”
Another local cryptocurrency exchange described the move in a blog, saying that “the circular is directed at banks and fintech [companies] regarding their operations with cryptocurrencies.”, noting that “Banxico mentions that it seeks to take advantage of the use of the technology of these cryptocurrencies as long as they are used for internal operations of financial institutions,”
The exchange expressed its own attitude in saying that the law “does not mean that operations with cryptocurrencies are prohibited.”
Banxico is ruining the country’s economy!
Acosta Checa sees that the circular Banxico issued was not clear and that it was written in a rush, without careful analysis and basic competence or interpretation of certain important points.
“financial institutions and foreign trade companies are not a ‘consumer’ and thus can operate freely” with his exchange, added costa.
He noted that his exchange, Isbit, has already “shifted gears to serving businesses, corporations and institutions (which are allowed to hold virtual assets in their balance sheets according to the previous bill published March 9, 2018). Thus we will not shut down or lose our most valuable customers,”
Acosta Checa also believes that the new crypto asset rules will negatively impact the country’s economy as a whole, explaining that “Mexico is the endpoint to the biggest remittance corridor in the world (second largest population of migrants), the 6th most visited country by tourists and is the country with the largest number of free trade agreements.” As a result, he sees that the country “has a lot to gain from the industrial application of virtual assets (activos virtuales) to facilitate free trade, tourism and financial inclusion,” concluding: “The impact goes beyond the crypto industry. I believe it damages the economy as a whole.”