Mexico, this month, will unveil proposed legislation aimed at regulating its fast-growing financial technology sector, including firms that use cryptocurrencies like Bitcoin.
The bill seems to be aimed at protecting customers, as well as spurring competition in this burgeoning industry. Mexico is also hoping, in this bill, to ensure financial stability and defend against money laundering and financing of extremists.
Massive potential growth in Latin America
Mexico will be joining a small list of countries, which include the UK and the US who have actively sought to regulate not only cryptocurrencies, but also fintech companies.
The hope for fintech companies is to try and crack a massive potential market as over half of Mexico’s 120 mln strong population are bank account-less.
"This legislation recognizes the need that a sector as dynamic as that of technological innovation needs a regulatory framework that allows authorities to mitigate risks and allow for growth in a competitive environment," the bill draft says.
What’s in the Bill?
The Bill proposes to set out a clear set of rules pertaining to the running of fintech companies which will help reduce costs and drive competition in a sector that includes crowd-funders and payment firms.
Additionally, there will be a section aimed at regulating companies that operate with digital currencies, such as Bitcoin. There is not too much detail on this, but it does say a lot of it will fall to the central bank to referee such actions.
"The regulation is good news for all companies in this sector because ... growth will be greater with clear rules," said Luis Ruben Chavez, the founder of Mexican crowdfunding firm Yotepresto.
Massive Mexican growth
Mexico is a huge untapped market globally, and especially in Latin America where it leads the way.
In 2015, the number of fintech companies came in at about 50, while year to date in 2017 there are already 2401 known companies in the new industry.