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The Mexican cryptocurrency market is growing really fast, and this happens owing to a combination of strategic and instrumental government actions and a regulatory framework, large financial investments, and some influential market players and other reasons. This article will shed a light on the details pertaining to these make-or-break factors that help in understanding the bright under-growth and a promising future related to the cryptocurrency market in Mexico.
The Central Bank of Mexico is busy with its central bank digital currency; it could be launched as early as 2024. In its incipient stage, Banxico addressed the legal, administrative, and technological requirements in relation to the implementation of the currency. The potentials of launching such a CBDC are immense in terms of offering significant financial opportunities to unbanked people and enhancing financial inclusion. With the increased revenues and the bloom of blockchain projects in Mexico, banks and financial institutions have to strategize an approach for developing internal blockchain strategies during 2023 and beyond.
The Electronic Payment Financial Institution is an entity dedicated to the issuance, management, redemption, and transmission of electronic payment funds using any electronic or digital communication method within the country of Mexico. These shall be the equivalent of money in local or foreign currency or to a certain number of units of Virtual Assets. An entity like this would have to obtain previous authorization from the NBSC and from its Inter-Institutional Committee composed of members from the Ministry of Finance and Public Credit, NFPC, NBSC, and Banxico for it to function on Mexican territory.
The FIU obliged the Non-Financial Entities that develop activities with VAs in Mexico, regardless of the fact that they are constituted abroad or their technological platform is located in foreign territory, to subject themselves to the Legal Framework of Combating Money Laundering and Financing of Terrorism in the legal system of this country, in correspondence with the recommendations issued by the FATF. Victoria Rodríguez Ceja, who is currently the Governor of Banxico, has stated that Mexico's central bank digital currency would start operations in 2025 within its long-term payments strategy. This would be quite captivating to see how the story of Mexico's CBDC pans out.
Crowdfunding Financial Institutions are financial institutions that provide for the financing raiser, a mean of raising financing—whether through debt, equity, co-ownership, or royalty financing—from the general public through any means or facility involving electronic or other digital communication. Such financial instruments could be denominated in local currency, foreign currency, or VA. A CFI will require authorization before the NBSC and its Inter-Institutional Committee if it wants to carry out its business in Mexico.
According to Circular 4/2019 of Mexico, Non-Financial Entities are in the clear for offering direct transactions with virtual assets to clients or users. If Banxico had recognized any virtual asset through this circular, offering transactions with such a virtual asset would have been presently allowed by Banks and FTIs; however, said allowance does not extend to Non-Financial Entities to their clients. Those Non-Financial Entities dealing in transactions related to Virtual Assets shall be covered under an Anti-Money Laundering Law and its backing legislative rules and regulations, and general rules developed under the law.
Cryptocurrency market in Mexico is expected to reach US$43 million in 2028 from US$28 million in 2024, at a CAGR of 11.6%.
The strong growth is also owing to the good economic climate now reigning in Mexico—boasting improvements in the key sectors of technology, manufacturing, and services. The high CAGR indicates that this market is dynamic and fast-growing; there will be much activity in business and investment with corresponding benefits to enterprises. The growth pattern it gives is underpinning the increased attractiveness Mexico holds, with very promising grounds for investment and dynamic opportunities for local and international players.
Regulatory Bodies
The most powerful regulatory bodies that seem to chase for cryptocurrency solutions in Mexico are the National Banking and Securities Commission and the Financial Action Task Force.
Associations
In the framework, principal associations in charge of making sure that the stipulated laws, regulations, and standards within the cryptocurrency market in Mexico are complied with would be the CFA Society Mexico, the Association for Digital Asset Markets, and the Blockchain Association of Mexico.
Key Investments in Mexico
Major investment activities related to the Mexican cryptocurrency market include mergers and acquisitions, partnerships, funding, product launches, and service launches. Etherfuse declared a 'Stablebond' at the breakpoint conference of Solana in Amsterdam in October 2023. The offering for this tokenized bond was targeted at the retail investors in Mexico. Through the Stablebond platform, the initiative aims at growing decentralized blockchain infrastructures that offer retail investors in Mexico access to investment opportunities in tokenized bonds.
In March 2023, TruBit partnered with SPEI—Sistema de Pagos Electrónicos Interbancarios—the real-time settlement system coming from Banco de México, and the largest cryptocurrency wallet and exchange platform operating in Latin America. This cooperation enables the buying and selling of crypto assets quickly and safely directly with the Mexican Peso.
Key Players in Mexico
Axkan, Trubit Pro aka Mexo.io, Duly Coin, Sixtant, Bitcoin42 aka Naome, Bitso, Galactic Holdings, DolarApp, Dex-Trade, Crecy, Volabit, Será, Dividendee, and MotusDAO are key players operating in the Mexican cryptocurrency market. All these initiatives and regulatory frameworks, together with the listed key players, bring about a dynamic scenario for a fast-moving cryptocurrency landscape within Mexico.
