(Mar. 28, 2018) Mexico’s Law to Regulate Financial Technology Companies, enacted in March 2018, includes a chapter on operations with “virtual assets,” commonly known as cryptocurrencies. (Ley para Regular las Instituciones de Tecnología Financiera [Law to Regulate Financial Technology Companies] arts. 30–34, DIARIO OFICIAL DE LA FEDERACIÓN [D.O.F], Mar. 9, 2018, Mexican House of Representatives website.)
This chapter defines virtual assets as representations of value electronically registered and used by the public as means of payment for all types of legal transactions and whose transfer may be done only through electronic means. (Id. art. 30.) It also provides that Mexico’s legal currency may not, under any circumstance, be considered as a virtual asset. (Id.)
Mexico’s Central Bank has been granted broad powers to regulate virtual assets, including
- authorizing the specific virtual assets allowed in the country,
- defining the particular characteristics of virtual assets and the conditions and restrictions applicable to transactions with them, and
- authorizing financial technology companies to perform transactions with virtual assets. (Id. arts. 30–32.)
Pertinent regulations applicable to these assets must be issued by Mexico’s Central Bank within a year from the enactment of the Law. (Id. sexta disposicion transitoria (II).)
Financial technology companies that carry out transactions with virtual assets must disclose to their clients the risks applicable to these assets in a clear and accessible manner on their respective websites or through the means that they use to provide their services. (Id. art. 34.)
At a minimum, financial technology companies must inform their clients of the following:
- A virtual asset is not a legal currency and is not backed by the federal government or by Mexico’s Central Bank.
- Transactions with virtual assets, once executed, may be irreversible.
- The value of virtual assets is volatile.
- Virtual assets contain inherent technological, cybernetic, and fraud risks. (Id.)