Mexico’s Finance Minister Confirms Cryptos Are Banned From Financial System

Mexico’s Finance Minister Confirms Cryptos Are Banned From Financial System

A top Mexican official reiterated on Monday a ban on the use of cryptocurrencies in the country’s financial system.

Arturo Herrera, Mexico’s finance minister, said cryptocurrencies aren’t legal tender assets and aren’t treated as currencies within the country’s current regulatory framework.

Those bans are not expected to be lifted in the short term, Herrera said during a presentation to the Financial Action Task Force, a global anti-money laundering group.

The announcement comes after a Sunday pronouncement by billionaire Ricardo Salinas Pliego, a noted bitcoin bull, that he was working to make Banco Azteca, the first bank in Mexico to accept the cryptocurrency. Salinas is chairman of Grupo Salinas, the bank’s parent company.

Herrera’s comments weren’t explicitly tied to Salinas’ pledge, but came within hours of the businessman’s announcement.

Herrera said his secretariat will publish a four-page communiqué detailing the government’s position.

In a joint statement, the Central Bank of Mexico, the finance secretary and the National Banking and Securities Commission specified that cryptocurrencies are neither legal tender assets nor currencies under the current legal framework. In addition, they warned about the risks of using cryptocurrencies.

The document consists of four pages and was characterized by Herrera as “unusually extensive.”

The three entities reiterated the warnings they issued in 2014, 2017 and 2019 about crypto’s risks as a form of exchange, store of value or other form of investment.

In addition, the document said that financial institutions in Mexico are not authorized to deal with virtual assets such as bitcoin, ether, XRP and others, “in order to maintain a healthy distance between these and the financial system.”

Financial institutions that conduct or offer operations with virtual assets without an authorization will be in violation of the regulations and subject to applicable sanctions, the report added.

Mexico is the headquarters of Bitso, the largest cryptocurrency exchange in Latin America. In May, the company raised $250 million in its Series C funding round and reached a $2.2 billion valuation.

The statement on Monday affirms that the government has not authorized the collection of deposits from the general public “through technological schemes related to blockchain or distributed registries, known as stablecoins.”

In May, Bitso CEO Sergio Vogel said on CoinDesk TV’s “First Mover” program the exchange, which has 2 million users, has seen a sharp increase in demand for dollar-linked stablecoins.

Bitso didn’t immediately respond to CoinDesk’s requests for comment.

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