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New Regulations in Mexico Restrict Banking Services for Crypto Investors

Mexico’s Central Bank, the Bank of Mexico, has updated regulations for financial entities that restrict the services they can provide to regular cryptocurrency investors.

Financial entities are first required to identify all the customers they have involved in cryptocurrency trading, and then sort out those operating on a regular or professional basis. Those that fall into this category must only be given demand deposit accounts and are required to provide additional identification data.

Banking service providers are told to refrain from opening new accounts to regular or professional traders, and any funds transferred to crypto beneficiaries are required to undergo additional validation checks. Each financial entity must provide accessible policies and procedures to prevent any illicit proceeds from being transferred to or from crypto-related accounts.

The regulations go as far as to prohibit banks from making resources available to crypto clients on the same banking business day that funds are deposited; should the Bank of Mexico issue any last minute notice that the bank should intensify the monitoring of the clients.

The central bank said that measures have been taken in order to prevent money laundering or illicit financial activities in Mexico. However, banks have raised concerns over how the new policies will be a detriment to market efficiency. Cryptocurrency exchanges have also expressed their views that the new know-your-customer (KYC) guidelines combined with the regulations will slow the speed of transactions and increase the cost for the process.

All authorized cryptocurrency exchanges must also comply with an additional set of guidelines issued by the Bank of Mexico, under the FinTech law that sets terms and conditions relating to the custody and control of digital currency assets.

Financial entities have until September 2019 when the regulations will be in effect, to comply with the new rules.

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