Mexico jumps in to warn about crypto ban for banks after billionaire Ricardo Salinas Pliego reveals bitcoin acceptance plan

Photo illustration of visual representations of digital cryptocurrencies
  • Financial institutions in Mexico are prohibited from operations using crypto assets, authorities warned on Monday.
  • The reminder came after billionaire Ricardo Salinas Pliego said his bank plans to do business in bitcoin.
  • Cryptocurrencies are not considered legal tender, Mexico’s central bank and others said.
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Mexico’s central bank reminded financial institutions on Monday that they cannot trade or offer services on assets such as bitcoin, ether, or XRP, and stressed that cryptocurrencies are not considered legal tender.

The warning on Monday came after Mexican billionaire Ricardo Salinas Pliego said at the weekend that his bank, Banco Azteca, was working on becoming the first in the country to carry out business in bitcoin.

Mexico’s central bank and other financial authorities appeared to be pushing back against the businessman’s bitcoin plans, stressing that crypto assets are not treated as currencies under the regulatory environment.

“Virtual assets do not constitute legal tender in Mexico nor are they currencies under the current legal framework,” Banxico said in a joint statement with the country’s finance ministry and the banking regulator, translated from Spanish.

No direct mention was made of Salinas Pliego, nor any reference to his plan to conduct business in bitcoin, as they pointed out the risks involved in the use of virtual assets as a means of exchange or store of value. But at the same time, the authorities did caution that companies offering operations in cryptocurrencies would be subject to sanctions.

“The country’s financial institutions are not authorized to carry out and offer to the public operations with virtual assets, such as bitcoin, ether, XRP and others in order to maintain a healthy distance between them and the financial system,” they said.

Regulators around the world have stepped up their attention on cryptocurrencies such as bitcoin, citing their appeal for use in criminal activity. Many economists see bitcoin prices as too volatile for the crypto to take a more mainstream role, given its vulnerability to comments on social media and other external factors. Bitcoin was last trading 3% higher around $35,740 on Tuesday, down from close to $65,000 in April, and is up 23% so far this year.

Salins Pliego, the owner of Banco Azteca and the third-richest person in Mexico, tweeted on Sunday that he thinks fiat currencies are a fraud, and he endorsed bitcoin as a portfolio diversifier.

In a video posted to Twitter, he said the “dollar as hard money is a joke.” His comments came just weeks after El Salvador said it would make bitcoin legal tender with effect from September.

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