Regulations

The Central Bank of Mexico proposes crypto regulations for the economy

Mexico proposes crypto regulations

The Mexican central bank has proposed laws that will require cryptocurrency exchanges to have a license in order to operate. However, this license does not grant them permission to list crypto services. This will therefore make it hard for there to be almost any legal crypto exchanges in Mexico.

According to reports coming from coin center, a non-profit cryptocurrency research and advocacy group, advocacy groups have started to become alarmed because of the harsh regulations that are being proposed by the Mexican Central Bank and Banco De Mexico.

The executive director Jerry Brito and director of Coin Center and researcher Peter Van Valkenburgh thinks that the proposed rules are draconian and can not help the growth of cryptocurrency exchanges.

According to them:

“Cryptocurrency exchanges dealing in fiat currency need access to the local banking system. Under the new law, that access will be severely imposed. While the central bank can claim that they are not ‘banning’ exchanges, the effect will be the same.”

Regulations need to move forward and within reasonable grounds. These new regulations on cryptocurrencies put in place by the Mexican Central Bank are not in favour of the growth of cryptocurrencies in the country.

The new Fintech law in the country does not support an environment for cryptocurrency exchanges in Mexico to strive. The law prevents crypto exchanges from accessing legal status as a financial institution as banks in the country do not want to work with cryptocurrencies like bitcoin and Ethereum, as these are trending technologies that will disrupt the traditional financial model.

“The Mexican Central Bank proposal, unfortunately, demonstrates a dismissive ignorance of how these technologies work. The difficulty for users to understand these processes, along with the volatility of digital assets, present an information asymmetry problem that, apparently, can only be addressed by quarantining consumers from direct contact with crypto.” Coin Center

The country’s central bank thinks citizens are incapable of understanding cryptocurrency and should therefore not be allowed to purchases any. However, this a clear example of how the Central Bank in Mexico chooses not to work in goodwill with the global economy.

The Indian Crypto community is at a similar situation after the country’s Central Bank prohibited banks from dealing with any crypto-related businesses last year. This led the Indian Supreme Court to provide a draft of the use cases of cryptocurrency.

What do you think of these policies being made by the Central Bank of Mexico? Please feel free to leave a comment down below.

coinmag

My occupation is the Research of blockchains and their practical applications in the economy. I have graduated through various levels of education, including electrical technique, Business, Psychology, and innovative technologies.

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