On 5th December 2017, the Mexican Senate gave green light to a fintech bill that intends to regulate the nation’s progressing financial sector and developing crypto market.
In the past, fintech firms did not fall under any specific regulatory framework in Mexico. That’s all about to change if the bill the Mexican Senate just passed can make it through the national legislature’s lower chamber.
The bill seeks to foster economic growth while stamping out risk:
“This (legislation) recognizes the need that a sector as dynamic as that of technological innovation needs a regulatory framework that allows authorities to mitigate risks and allow for growth in a competitive environment.”
An independent commission first reviewed the fintech bill, which was then later introduced into the Senate for approval. The draft law passed the Senate vote and is set to be sent to the lower house in the coming days.
Crypto-based companies fall under the wide purview of “fintech,” both in Mexico and across the world. Thus, this new bill affects Mexican cryptocurrency and blockchain projects directly.
The approved proposal is set to create a regulatory body to monitor fintech companies with the clear set of rules. Senators in favor of the bill argue this model shall lower costs and bring in competition to the market.
The primary aim of the bill is to foster financial stability for startups and combat money laundering. It also focuses on battling illegal funding of political extremists.
Only a part of the bill explicitly sets regulatory laws for companies that work with cryptocurrencies. As per the draft law, the nation’s central bank will referee the majority of the crypto market regulations.
According to the Mexican legislative process, the proposal does not comprise specific laws that the government plans to put into effect. Further information will be detailed in secondary laws.
The current Mexican government measure seems to be at odds with other Latin countries that have moved to stymy use of cryptocurrencies. Concurrently, the Colombian government has entirely banned the use of Bitcoin. Even the Venezuelan government is planning to crack down on all Bitcoin miners.
Meanwhile, it seems Mexico is taking the opposite approach. And that could really pay off in several ways, as fintech companies in the country have increased by fourfold in a couple of years.
Will the fintech bill freeze the growing crypto market of the country? Let us know your thoughts in comments section below.
Images via alwaysdive, YouTube