Key Takeaways
- Mexico financial authorities warn financial institutions from offering crypto services
- Bitcoin does not have the characteristics of a legal tender
- Digital asset adoption seen as a hedge against inflation
This information was contained in an official statement released by the country's Secretary of Finance and Public Credit, Arturo Herrera Guiterrez, on Twitter. The document signed by the Bank of Mexico, Ministry of Finance, and the National Banking Securities Commission was direct to the point.
Banks and financial institutions are prohibited from providing crypto-related services involving digital assets like Bitcoin, Ether, and more to the general public. The statement also warned of severe legal repercussions for defaulters according to the Penal Code of the constitution.
Stablecoins are not left behind from the ban despite not having similar volatility to other popular digital assets. Bitcoin has long been seen as a danger by many financial institutions globally, and it is not surprising to see the Mexican government kicking against its adoption.
Herrera Guitierrez had earlier spoken in the week against the adoption of crypto-related services by financial organizations in Mexico. Gutierrez believes that a country's legal tender must meet three requirements. It must serve as a unit of measurement, a medium of exchange, and a reserve of value.
However, according to the finance chief, cryptocurrencies like bitcoin, ether, and others do not meet these requirements. "[Cryptocurrencies] cannot be considered legal tender because they are clearly not a store of value, they are only assets that are considered speculative due to their [price] variations."
In addition, Herrera Guitierrez believes that bitcoin is associated with illegal transactions due to a lack of traceability. This revelation comes only days after the CEO of Banco Azteca, Ricardo Salinas, hinted that the bank was working on offering crypto services to clients.
Many Mexicans have turned to digital assets as a hedge against the Mexican Peso. The Peso has experienced devaluation of up to 100% in the past decade.
Question of the Day
Do you think Mexico negative outlook on crypto will change anytime soon?
