Mexico’s Central Bank is Skeptical of Crypto Use Following Salinas’ Announcement

News / 29.06.2021

Mexico’s Central Bank, via a statement, warned all commercial institutions from offering services or trading with the public in cryptocurrencies such as Bitcoin. This was a joint statement between Banxico, Mexico’s Central Bank, the National Banking and Securities Commission, and the finance secretary.

Cryptocurrencies’ Classification 

It also claimed that cryptocurrencies are neither currencies under the present legal framework nor legal tender assets. They also warned against the inherent risks of using cryptocurrencies.

This warning comes just a day after Mexican billionaire Salinas Pliego announced that his bank was on the road to embracing the virtual token. In the statement, Banxico said that undertaking or offering crypto services would be regarded as a violation of financial regulations, and the company could be subject to various sanctions.

However, no direct mention or reference was made of Salinas Pliego, the owner of Banco Azteca, nor any reference to his plan to do business in Bitcoin. It will have

Specifically citing bitcoin and Litecoin, and other digital currencies, the bank also said that their use as a means of payment is not guaranteed because enterprises and the general public are not required to embrace them.

In line with other world’s central banks’ statements, the bank deemed it essential to warn users of the supposed links between virtual currencies and crime. “The currencies have been used for illegal operations such as money laundering and fraud in other jurisdictions,” the bank added.

Impact on Cryptos

Over the past few years, there have been several similar warnings on the legality of cryptos in countries like Cyprus, Hungary, and the Philippines. However, these statements from Mexico and other central banks, while negative, may not have much of an impact on the country’s bitcoin user base.

For instance, Russia seemed to have forbidden bitcoin only to backtrack its footsteps, claiming it was simply investigating how best to deal with virtual currencies and restrict their use in crime-related activities. Moreover, the US has recently somewhat been reversing its stern against Bitcoin.

Apart from being aggressively authoritarian by suggesting that ordinary people cannot make their own decisions, their argument is absurd. For instance, the average person does not understand how a car moves, but still, people are allowed to drive them. Likewise, because cryptos are quite complicated to understand, average citizens cannot know how they work and should not buy them.

The crypto market has experienced a variety of regulations that either seek to support or weaken their survival. In addition, most countries exhibit a dismissive ignorance of the new technologies. However, the future is still luminous, and the cryptocurrency market is regarded as the predecessor of the traditional financial systems.

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Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.