Earlier this month, Mexico’s central bank proposed new laws for cryptocurrency in line with the country’s newly effective fintech regulations, prompting one crypto research group to come forth and denounce them as “a misguided policy that we hope the central bank will reconsider”.
Coin Center – non-profit cryptocurrency research and advocacy group – believes strongly that if the new laws should come to pass, this will “effectively ban cryptocurrency exchanges” in Mexico.
This is because in order for crypto exchanges to legally operate, they will need to acquire an operation license – but the license will not allow them to list crypto services.
Coin Center’s executive director Jerry Brito and director of research Peter Van Valkenburgh jointly commented that while such a move will allow the Mexican central bank to claim it is not outrightly banning crypto exchanges, “the effect will be the same”.
“The Mexican Central Bank proposal, unfortunately, demonstrates a dismissive ignorance of how these technologies work… the ‘difficulty for users to understand these processes’, along with the volatility of digital assets, present an information asymmetry problem that, apparently, can only be addressed by quarantining consumers from direct contact with crypto.” Brito and Valkenburgh asserted.
In a scathing attack, they further argued that “aside from being aggressively paternalistic by suggesting that the average Mexican does not have the capacity to make her own decisions on these matters, the argument is also absurd. The average person has no idea how a car works, and yet people are allowed to drive them.”
“Should these rules be enacted, they would deny Mexicans the benefits of cryptocurrency technology while simultaneously failing to protect them from the risks. No other major economic power has taken such an extreme and unwarranted approach to regulating cryptocurrencies…”
Mexico’s draft law proposal is open for 60 days to the public for feedback, to which Coin Center says it “intends to file a comment”.