Mexico Releases New Regulations for Crypto-related Banking Services
The Bank of Mexico has released an update regarding its regulations for financial bodies, restricting them from providing their services to regular cryptocurrency investors.
Financial entities have to verify the identity of all their customers that trade with cryptocurrencies and categorize by their trading (if it’s on a regular or professional basis). Those that trade professionally can only have demand deposit accounts and they have to supply additional identification data.
According to the new regulations, banking service providers must abstain from opening new accounts for regular or professional traders, and any funds moved to crypto recipients have to go through more validation forms. Each financial body must supply manageable policies and measures that can deter the transfer of illicit proceeds to or from crypto-related accounts.
The updates also forbid banks from making funds accessible to crypto clients on the same banking business day in which the deposit has occurred; if the Bank of Mexico sends any last minute notices in which it directs the bank to monitor its clients more thoroughly.
The central bank stated that these measures were implemented in order to deter money laundering or illegal financial activities in the country. Nevertheless, banks have expressed their worries regarding these new policies, stating that they will be detrimental to market efficiency.
Cryptocurrency exchanges have also voiced their concerns about the new know-your-customer (KYC) guidelines which together with the regulations will make transaction time much slower and more expensive.
All approved cryptocurrency exchanges have to also meet the terms of a further set of guidelines dispensed by the Bank of Mexico, under the fin-tech law that establishes the terms and conditions regarding the ownership and control of cryptocurrencies.
The regulation will come into effect on September 2019, leaving financial entities with nearly a year to comply with the new rules.