Mexico is close to passing legislation that will bring major changes to how cryptocurrency is regulated and defined there.
While some critics of crypto in the country have vociferously warned against legitimizing Bitcoin and its crypto peers, the rule change set the stage for eventual acceptance and possibly mainstream use.
Recently passed by the lower chamber of the Mexican Congress, the bill seeks to focus on the issues of crowdfunding and cryptocurrency regulations.
If signed into law, the legislation would put Mexico in a small group of countries that are looking to supervise the rapidly growing field of cryptocurrency and fintech.
The Mexican Senate passed the bill in December.
According to the bill, its purpose is to “promote financial stability and prevent money laundering.”
Nevertheless, the language of the bill is still in flux. While it seeks to outline broadly the rules on cryptocurrency, “secondary laws” are thought to regulate the details for companies that will be directly dealing in cryptocurrency.
The bill also declares cryptocurrency not legal tender in Mexico.
This is in step with statements already made by the Mexican central bank, Banco de Mexico. Agustín Carstens, a former governor of Banco de Mexico, put forward the idea that Bitcoin should be classified as a commodity and not as a currency.
The bill’s other major proposal is to put cryptocurrency exchanges under the supervision and regulation of Banco de Mexico. The exchanges will have one year to submit to these new regulations.
The bill also would allow the “sharing of user information by financial institutions through public application programming interfaces (APIs).”
“Open banking recognizes that the information in the hands of the financial institutions is the property of the user, not the institution’s, and that it can be brought to other financial intermediaries,” said Francisco Mere, the president of industry group Fintech Mexico.
Effectively, what this provision means for your average customer is that financial institutions will be able to access a customer’s information from a large bank’s database.
This provision will only be put into practice if the client agrees to it.