The Blockchain Association Mexico worries that the nation’s central bank could undermine access to financial services there. Both Circular 17/2018 and Circular 18/2018 , which are addressed to participants of the System of Interbank Electronics Payments (SPEI), propose limiting who can make virtual transfers and in which currencies.
The first circular, as reported by CCN, reads:
“The institutions of electronic payment funds must request [an] authorization from the Bank of Mexico so that they can use technologies associated with any virtual assets”
After the first came the second circular. And now the Blockchain Association Mexico contends these circulars could block access for many Mexicans to virtual financial services.
The Bank of Mexico could derail financial inclusion by creating unnecessary barriers, according to the Association. It claims that Circular 17/2018 and Circular 18/2018 undermine blockchain adoption in Mexico.
“These measures limit use cases such as remittances, intangible payments, and financial inclusion,” claims the Association. “On the other hand, they generate a decline in the competitiveness of companies in the sector with their global competitors.”
The Association wants to work with authorities to create a regulatory structure that “fosters the responsible development of financial technology” for Mexicans. “We consider it important that the country has a regulatory policy that addresses the challenges and objectives of the sector while keeping it competitive,”Allan Cassis, spokesman for the Association Blockchain Mexico and founder of Lvna Capital, told Expansión. “So we call on all participants to propose comprehensive solutions and promote public policies that accelerate the modernization and capacity of the sector for the financial inclusion of all Mexicans and, in particular, of the entire young population.”
Bitcoin has enjoyed moderate adoption in Mexico. Mexican crypto exchange Bitso boasts 500,000 users in a country where 80 million lack banking service access. Decentralized logistics platform dexFreight and Texas A&M Transportation Institute (TTI) are running the Port of Veracruz’s blockchain project.
The Blockchain Association Mexico’s mission is to promote blockchain technology and “accelerate the process of financial inclusion of all Mexicans.” The organization recognizes the commitment of the Government of President Andrés Manuel López Obrador to implement policies that promote financial inclusion
The bill refers to SPEI (electronic interbank transactions), which might for example be relevant if someone in Mexico wanted to cash out from, say, Bitso. The bill applies mostly to banks and organizations that use SPEI to offer transfer services. It could affect blockchain organizations – or any organization – that wanted to raise capital, especially via crowdsale or token sale. Organizations will by law need to comply with authorities seeking information.
Mexico has been a leader in the fintech sector. “Regulators recognize challenges accompanying the benefits of wider fintech adoption,” wrote Michael Perez, Financial Industry Analyst III at Federal Reserve Bank of Dallas. ”Mexico follows in the steps of the UK which was the first country to adopt comprehensive regulatory standards and politics specifically for fintech.”
Mexico established a sandbox for financial innovation, similar to not only the UK’s Financial Conduct Authority (FCA), but, also, to similar proposals by OCC and Treasury.
Alongside the Bank of Mexico, the Ministry of Finance and Public Credit (SHCP) and the Association of Bankers of Mexico (ABM), the Blockchain Association Mexico is a part of the Program to Promote the Financial Sector. This initiative meant to address the need to promote innovative, accessible solutions for Mexicans. The Association’s mission is to promote blockchain technology and “accelerate the process of financial inclusion of all Mexicans.” It estimates there are 800,000 blockchain users in the country of 129 million.