Mexico Reiterates its Crypto Warning, says Financial Institutions Are Not Authorized to Deal with Virtual Assets
This warning came after Mexico billionaire Ricardo Salinas Pliego endorsed Bitcoin, saying his banking business Banco Azteca may begin using BTC and become the first bank in the country to start accepting the cryptocurrency.
Mexican financial authorities are clarifying that crypto assets are not legal tender in Mexico and aren’t considered currencies under current laws.
However, Mexican regulators aren’t really interested and released a statement saying,
“The financial authorities reiterate their warnings … on the risks inherent in the use of so-called ‘virtual assets’ as a means of exchange, as a store of value or as another form of investment.”
The joint statement by the Bank of Mexico, finance ministry, and banking regulator also warned that financial institutions that operate with them are subject to sanctions.
“The country’s financial institutions are not authorized to carry out and offer to the public operations with virtual assets, such as Bitcoin, Ether, XRP and others in order to maintain a healthy distance between them and the financial system.”
Can’t Accept Crypto Even If You Want To
The statement comes after the third richest man of Mexico, billionaire Ricardo Salinas Pliego endorsed Bitcoin, saying his banking business Banco Azteca may begin using BTC and become the first bank in the country to start accepting the cryptocurrency. Luis Gonzali, co-director at Franklin Templeton Investments in Mexico, said,
“It’s a reaction to the comments Salinas Pliego made over the weekend. It’s a way of saying his bank can’t accept bitcoins even though he wants to … it’s a way of putting a stop to him.”
Salinas Pliego is an ally of President Andres Manuel Lopez Obrador’s MORENA party and previously backed a MORENA bill that would have forced the Bank of Mexico to buy up foreign cash in a bid to help migrants and tourists repatriate US dollars.
The bill was eventually overhauled as it was seen as largely benefiting Azteca, one of the country’s leading remittance processors.
Financial institutions in the country must also avoid transmitting to their clients the risk associated with the crypto operation, the statement said, adding the use of stablecoins wasn’t permitted under current Mexican law either.
In a new conference, finance minister Arturo Herrera said that under current rules, cryptocurrencies are prohibited from being used in the country's financial system, emphasizing that this will likely not change in the near term.
Cryptocurrencies tend to be volatile and speculative, which do not serve the same function as money, “since their acceptance as a means of payment is limited and they are not a good reserve or value reference,” said the statement.