Skip to content

Cryptocurrencies in Mexico

Luis A. Nicolau Gutiérrez and Gabriel Robles Beistegui, of Ritch Mueller, identify the regulatory questions surrounding virtual currencies.

Published on 31 March 2022
Luis A. Nicolau Gutiérrez
Ranked in 3 departments in Chambers Global 2022
View profile
Gabriel Robles Beistegui

The worldwide interest in virtual currencies, including cryptocurrencies, has substantially increased during the last few years, and cryptocurrencies are the subject of heated debates and increased interest amongst central banks, regulators, financial institutions and institutional investors. In Mexico, there is ongoing debate in respect of:

  • whether cryptocurrencies should be regulated in a manner equivalent to securities;
  • whether financial institutions (particularly banks) may participate, and to what extent, in the offering and selling of cryptocurrencies; and
  •  whether regulators should protect, and to what extent, investors in cryptocurrencies.

Although Mexico has developed its own legislation, based upon its own specific issues and concerns, it has remained open to influences from other jurisdictions that have enacted cryptocurrency rules.

"Mexico's Central Bank has determined that no virtual currency is currently subject to regulation, that it does not constitute a lawful currency in Mexico, and may not be offered or traded by Mexican regulated financial institutions."

In May 2021, Mexico enacted the Law Regulating Financial Technology Institutions (Ley para Regular las Instituciones de Tecnología Financiera) the Fintech Law which expressly contemplates the regulation of virtual currencies, including cryptocurrencies.

Despite the surge in investments in virtual currencies in international markets, and the interest among international institutional investors and certain countries (eg, El Salvador), pursuant to Circular 4/2019 of Mexico's Central Bank and Communication No 039 issued by Mexico's Central Bank, the Mexican Ministry of Finance and the Comisión Nacional Bancaria y de Valores (CNBV), at the present time Mexico's Central Bank has determined that no virtual currency is currently subject to regulation, that it does not constitute a lawful currency in Mexico, and may not be offered or traded by Mexican regulated financial institutions.

Development of Cryptocurrencies in Mexico

Although the Mexican Central Bank, has determined that none of the existing cryptocurrencies will be covered by the Fintech Law, this determination is reviewed periodically and may be changed over time, especially considering international trends and a growing interest by investors, including tech start-ups, venture capital funds and public investors.

Cryptocurrencies have particular relevance in Mexico, as they are a means through which remittances are forwarded by workers in the USA to their families in Mexico.

Currently, Mexican investors maintain virtual currencies via accounts located outside of Mexico. Activities involving virtual currencies within the country are conducted by non-regulated resident and non-resident entities, without a licence. However, the receipt or delivery of cash, in connection with the purchase or sale of an underlying virtual currency, is made by any of (i) an entity licensed under the Fintech Law or a Mexican bank, (ii) a non-Mexican entity that may receive funds, or (iii) temporarily, pending an investment in a virtual currency, by a non-regulated entity.

To reduce the risk of potential regulatory complications for entities dealing with virtual currencies, most cryptocurrency players have decided to conduct their business:

  • from outside of Mexico, on a cross-border basis;
  • without employing any targeted advertisement strategies in Mexico (advertisements should be made to the public in general, without targeting Mexican investors specifically or the Mexican market generally);
  • without any direct contact with prospective clients in Mexico (in other words, passively, without any solicitation in Mexico); and
  • ensuring that all necessary documentation is executed outside of the country.

In order for any entity providing services involving virtual currencies, including providers of virtual currency wallets and trading services in respect of cryptocurrencies, no physical presence is required or advisable in Mexico, particularly in light of increased sensitivities to virtual currencies by the Mexican Central Bank, as evidenced by Communication No 039.

The Likelihood of Future Growth

There is no certainty that the current perception of cryptocurrencies and their use as a legal currency in Mexico by Mexican regulators will change in the near future and, therefore, that the lack of regulation thereof will be dismissed for example, by assimilating virtual currencies to securities and regulating them in a similar fashion, Be that as it may, operations with such currencies in the Mexican market are likely to continue to grow and result in various players seeking to participate more actively in this market by taking advantage of the absence of regulation. It is important to note that one area where virtual currencies are already subject to regulation in Mexico is in connection with anti-money laundering.

Mexican regulators including Mexico's Central Bank and the CNBV will not be immune from pressure from institutional investors and other central banks to assertively regulate this growing market, to avoid abusive practices and, ultimately, to act in the interests of public investors

As Mexican and international technology-driven financial services companies continue to penetrate the Mexican economy and disrupt the Mexican financial services market, including in connection with cross-border remittances, the use of virtual currencies will keep growing, together with the pressure to modify regulation.

Ritch Mueller

9 ranked departments
Learn more about the firm’s ranking in Chambers Latin America 2022
View firm profile

Chambers Global Practice Guide Fintech 2022

Learn more about global developments in Fintech.