Mexico and Cryptocurrency

Mexico Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

Mexico’s Law to Regulate Financial Technology Companies, enacted in March 2018, includes a chapter on operations with “virtual assets,” commonly known as cryptocurrencies.[54] This chapter defines virtual assets as representations of value electronically registered and utilized by the public as a means of payment for all types of legal transactions, which may only be transferred electronically.[55]

In addition, Mexico has enacted a law extending the application of its laws regarding money laundering to virtual assets, thereby requiring financial institutions that provide services relating to such assets to report transactions exceeding certain amounts.[56]

Mexico’s Central Bank is granted broad powers under the Law to regulate virtual assets, including

  • specifying those virtual assets that financial companies are allowed to operate with in the country, defining their particular characteristics, and establishing the conditions and restrictions applicable to transactions with such assets; and
  • authorizing financial companies to perform transactions with virtual assets.[57]

Pertinent regulations applicable to these assets must be issued by Mexico’s Central Bank within a year from the enactment of the Law.[58]

Financial companies that carry out transactions with virtual assets must disclose to their clients the risks applicable to these assets.[59] At a minimum, these companies must inform their clients, in a clear and accessible manner on their respective websites or through the means that they utilize to provide services, of the following:

  • A virtual asset is not a legal currency and is not backed by the federal government nor by Mexico’s Central Bank;
  • Once executed, transactions with virtual assets may be irreversible;
  • The value of virtual assets is volatile; and
  • Technological, cybernetic, and fraud risks are inherent in virtual assets.[60]

P.S. Insights on Cryptocurrency Legal Issues

Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.

Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.

However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.

Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency.  The globe below provides links to country-by-country summaries:

Podcast:

The Freeman Law Project – Cryptocurrency Regulation and Taxation: A Brief Primer

Is cryptocurrency legal in Mexico?

Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.


54] 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, available as originally enacted on the website of Mexico’s House of Representatives at http://www.diputados.gob.mx/LeyesBiblio/pdf/LRITF_ 090318.pdf, archived at https://perma.cc/SB6N-RQY7.

[55] Id. art. 30.

[56] Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita [Federal Law for the Prevention and Identification of Transactions with Resources of Illicit Origin] art. 17(XVI), Nota de vigencia, D.O.F., Oct. 17, 2012, available as amended through March 2018 on the website of Mexico’s House of Representatives athttp://www.diputados.gob.mx/LeyesBiblio/pdf/LFPIORPI_090318.pdf, archived at https://perma.cc/4UVN-GM98. .

[57] Ley para Regular las Instituciones de Tecnología Financiera [Law to Regulate Financial Technology Companies] arts. 30–32, 88.

[58] Id. sexta disposicion transitoria (II).

[59] Id. art. 34.

[60] Id.

Schedule a consultation
close slider

    Schedule a Consultation

    captcha