Mexico Bans Cryptocurrency Trades Or Services

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Mexico’s central bank and the country’s finance ministry says financial institutions are not allowed to utilise cryptocurrencies

Mexican financial regulators have joined other fiscal watchdogs around the world in firmly moving against cryptocurrencies such as Bitcoin.

Mexico’s central bank (Banxico) and Mexico’s Finance Ministry, as well as the country’s banking regulator, said financial institutions aren’t allowed to trade or offer services based on cryptocurrencies such as Bitcoin, Bloomberg reported.

The clear statement comes one day after Mexican billionaire businessman Ricardo Salinas Pliego said his bank (Banco Azteca) was on the way to accepting the virtual token.

Bitcoin (c) Alexander Kirch, Shutterstock 2014

Mexican refusal

But this was quickly slapped down by Mexican authorities, which said that carrying out and offering operations with crypto assets without authorisation would be seen as a violation of regulations and a company could be subject to sanctions.

“Virtual assets do not constitute legal tender in Mexico nor are they currencies under the current legal framework,” the authorities reportedly wrote in the statement Monday.

The Mexican authorities in their statement also reiterated warnings about the risks of using cryptocurrencies as a medium of exchange, store of value, or as an investment.

In order to maintain a healthy distance between virtual assets and the financial system, the authorities wrote, Mexican financial institutions are not allowed to offer operations in Bitcoin, Ether, XRP, and others.

Earlier, ratings agency Fitch had warned of greater risks for banks due to an El Salvador law that made Bitcoin legal tender in the country.

Soon after El Salvador became the first country in the world to accept Bitcoin as legal tender, the World Bank rejected a request from the South American country to help with the implementation of the move, due to concerns over transparency and the environmental impact of Bitcoin mining.

Crypto opposition

And Mexico is not the only country moving against cryptocurrencies.

The value of Bitcoin has slid dramatically after China vowed to crack down on crypto-mining in the country.

Last year China accounted for 65 percent of all Bitcoin production worldwide.

The People’s Bank of China has also recently summoned a number of major banks and lenders to tell them they must not provide crypto-related services.

In the UK, the governor of the Bank of England (BoE), Andrew Bailey, last month said cryptocurrencies “have no intrinsic value” and people should only buy cryptocurrencies if they are prepared to lose all their money.

BoE governor Bailey then went one step further and said cryptocurrencies and similar assets were a danger to the public.

It should be remembered that the Bank of England in September 2014 had warned that Bitcoin could pose a threat to financial stability in the UK should it see widespread adoption.

Last week the cryptocurrency briefly fell below $30,000 for the first time since January, to $28,890, which represents a staggering 50 percent fall in value since it reached an all-time high of $64,870 in April.

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