I am sure you all know all about Bitcoin by now. But here’s a little note: Bitcoin is a cryptocurrency that can be used as a digital currency to exchange anything from products and services to other currencies, even. Bitcoin makes private and yet extremely public transactions. While you can’t connect the cryptocurrency owner in the real world to the transaction, the transaction is open for all public to see. So, it is a double-edged sword kind of a deal. Hence, laws to regulate Bitcoin officially haven’t come into existence yet. Mexico is one such country with doubts about any cryptocurrency. Does Mexico accept Bitcoin? Is it legal to transact in Mexico via Bitcoin?
Does Mexico Accept Bitcoin?
Mexico doesn’t have a tag or a status to accept Bitcoin usage today. However, with the widespread use of cryptocurrency, we can safely say that Mexico is rethinking its ways of digitally transacting and evolving for the better. While the use of Bitcoin hasn’t been ruled illegal in Mexico, it hasn’t been recognized as a full-fledged government-regulated payment system either. However, the use of Bitcoin has been increasing following 2018. This article will serve as a play-by-play for the status of Bitcoin in Mexico.
Legal Communication from Financial Regulatory Authorities for Financial Institutions
The various financial regulators of Mexico have laid down official communication (The Fintech Law) about the use of cryptocurrencies and their applicability in the country:
- The cryptocurrencies do not hold legal status in Mexico, though they are not banned from use either.
- If financial institutions want to hold transactions using cryptocurrencies, they only may do so if the Mexican Central Bank has permitted them to use cryptocurrency. Also, they may only carry out these transactions with their customers or within the financial institutions themselves.
- Financial Institutions cannot engage with the public or outsiders (other than the clients of the firms themselves) while transacting through cryptocurrency.
Legal Framework for Non-Financial Institutions
For non-financial institutions engaging in using Bitcoin and other cryptocurrencies, the Federal Law for the Prevention and Identification of Operations with Resources of Illegal Proceeds (LFPIORPI) applies. The Law rules:
- The regulation of transactions done by non-financial entities to keep illegal money transactions and fraud activities in check
- Please register with the regulatory authorities to provide the transaction history of the entity, should it exceed a pre-determined money transfer amount in a fixed period.
Bitcoin Wallet used in Mexico
Like any other digital currency – PayPal, Apple Pay, PayU – cryptocurrencies also use a wallet system to be stored in and exchanged. Some of the Bitcoin Wallets widely used in Mexico are:
- Coinmama
- Coinbase
- Paybis
- Airtime
- Bitso
The Push for Legal Acceptance of Bitcoin
It may not be an accurate foretelling, but the acceptance of Bitcoin and other cryptocurrencies in Mexico might happen sooner than expected. The Ukrainian war is proving more harmful to the country’s assets than anticipated. With the increased risk associated with these assets, Mexico might depend on other assets to cover up losses.
Bitcoin and other cryptocurrencies are selling more steadily in the global markets. As a result, the Bitcoin trade showcases a more promising investment that might help Mexico get back on its feet and weather the storm caused by the Ukrainian war.
In the light of these events, Mexican Senator Indira Kempis favors passing a bill to make cryptocurrency legally acceptable in Mexico.
Conclusion
With Bitcoin becoming a widespread phenomenon and a convenient and considerably secure way of storing and transferring funds, Mexico has accepted cryptocurrency as not illegal. And what’s not tagged as “illegal” in Mexico is automatically considered under the “permitted” tag. However, any legal acceptance of Bitcoin being an official transaction platform has not been made either. Therefore, today, Bitcoin in Mexico can be used to transfer and receive funds only if the users abide by specific laws established by the Mexican authorities.
FAQs
Q. Do I need a license to use Bitcoin in Mexico?
A. If you are a non-financial institution/ person, you are not required by law to own a license to use Bitcoin or any other cryptocurrency. You only need to be by the LFPIORPI law.
However, if you a financial institution under the control of the Financial Regulators, you will be strictly regulated and require a permit and other inflexible restrictions to deal in cryptocurrencies.
Q. What happens to a Bitcoin account and funds if the owner/ user becomes incapacitated or deceased?
A. The funds in Bitcoin accounts work on a type of “Will” that the owner must fill out while making use of their crypto account. First, particular beneficiaries are mentioned, and what percentage of the funds should be transferred to whom. The residual funds in the account after the death or incapacitation of the owner are then transferred to beneficiaries bove.
