INNOVATION

Fintech. In October 2017, the then president of Mexico Enrique Peña Nieto introduced to Congress a bill to regulate financial technology institutions (Fintech). The bill, which allows for the legal operation of fintechs and crowdfunding companies, the use of crypto currencies and other “virtual assets” in Mexico, was passed in March 2018 but will only be fully enacted by 2020. The National Banking and Securities Commission (CNBV) and the Bank of Mexico (Banxico) are in charge of taking forward the regulation and the final details of its  implementation. To that end, in February the CNBV and Banxico will stage a series of public consultations on the issue.

Financial Technology Institutions (FTIs) will be able to finance projects and open bank accounts, and their operations will not be limited to a maximum amount of money. However, Banxico and CNBV must authorize these entities to start their activities. Between August and September 2018, public consultations were held to establish how these two entities would deliver the corresponding authorizations. Finally, on Monday, September 10, the results incorporating the comments received were published through a series of provisions published in the Official Journal of the Federation (DOF). Specifically, it defined the delivery of customer identification and risk assessment policies to the authorities, reports on international transfers and unusual operations, the characteristics of authorization requests, and the circumstances in which FTTs access credit.

This law may be taken as an example to follow by other Latin American countries such as Argentina and Colombia. Although the Colombian government issued a decree to regulate collaborative financing through the Ministry of Finance, there are no laws on this topic yet. However, the sector could be regulated in the coming year. Regarding Argentina, it is the country that has made the least progress on the issue. Nevertheless, conditions are being created for the development of FTTs, which would lead to the need to set clear rules for the sector in the future.

Next steps

Mexico now expects a new public consultation process that will close in March 2019. CNBV and Banxico will receive comments regarding the functioning of the cryptoactives and their regulation. The regulation will enter into full force from March 2020, after the last stage of public consultations by Banxico and CNBV.