After the restrictions imposed on the usage and operation of cryptocurrencies by China, the United Kingdom, and other countries, Mexico has clarified its position.
On Tuesday, the financial authorities stated unequivocally that cryptocurrencies are not permitted to be used within the financial system.
The Banco de México, the country’s central bank, issued a document with the National Banking and Securities Commission repeating its position. Arturo Herrera Gutierrez, Mexico’s Finance Minister, also tweeted a post explaining the new rules.
En los últimos días ha habido mucho interés en torno a las #criptomonedas.
En este comunicado @Hacienda_Mexico, @Banxico y @cnbvmx refrendamos la posición institucional sobre esto. pic.twitter.com/Zasd01lIxS— Arturo Herrera Gutiérrez (@ArturoHerrera_G) June 28, 2021
The authorities made these clarifications after billionaire Ricardo Salinas Pliego announced that his bank, Banco Azteca, was planning to accept Bitcoin.
The central bank may be enacting strict anti-corruption procedures to deter citizens from engaging in cryptocurrency trading.
The bank not only limited the use of cryptocurrencies in the financial system, but also warned consumers about the dangers of investing in them. Bitcoin is not classified as an asset class in the country; rather, it is considered an unlawful tender under the current legal system.
Since Mexico has a large community of crypto fans, the government may have difficulty getting people to accept the new laws. Ripple’s on-demand liquidity [ODL] service has seen a large amount of cross-border transactions.
This indicated that the country was using cryptocurrency. Although Mexico has not yet completely banned crypto, the impact of these new rules was unclear on businesses associated with the field, for instance, cryptocurrency exchanges.
Bitso has been a popular cryptocurrency exchange in the country, facilitating ODL transactions. The exchange reportedly has over 2 million users so far, which was large enough to indicate the awareness around virtual currencies.
Cryptocurrency traders were on the verge of panic as regulations tightened. The news has yet to have an impact on the cryptocurrency market, but given the previous week’s extreme volatility, more bearish volatility could lead to greater market drawdowns.