Mexico’s Monetary Authorities Pour Chilly Water on Billionaire’s Bitcoin Financial institution Plan

In short

  • Monetary authorities in Mexico have warned that establishments are prohibited from accepting Bitcoin as a result of the cryptocurrency isn’t authorized tender within the nation.
  • The warning got here after billionaire financier Ricardo Salinas Plíego revealed that Banco Azteca, one in all Mexico’s largest banks, was planning to just accept Bitcoin.

Mexico’s Ministry of Finance and the Financial institution of Mexico have issued a statement warning that cryptocurrencies usually are not authorized tender below the present legislation, and that monetary establishments that function with them are topic to sanctions. 

The warning comes sizzling on the heels of Mexican billionaire Ricardo Salinas Plíego’s plans to make Banco Azteca, the banking enterprise he based, the primary such establishment within the nation to just accept cryptocurrency. 

As per the joint assertion, “Nation monetary establishments usually are not licensed to conduct and provide public transactions with digital property, equivalent to bitcoin, ether, and others, to be able to keep a wholesome distance between them and the monetary system.”

Mexico’s Finance Minister Arturo Herrera additional mentioned that the ban won’t change within the close to future.

Banco Azteca’s Bitcoin plans

This week, Salinas Plíego revealed plans for Banco Azteca to just accept Bitcoin in a Twitter change with MicroStrategy CEO Michael Saylor, stating that, “me and my financial institution are working to be the primary financial institution in Mexico to just accept #Bitcoin”. He was responding to a video posted by Saylor, by which Salinas Plíego promoted Bitcoin and known as fiat forex a “fraud.”

Banco Azteca claims to be one of Mexico’s largest financial institution establishments, with over 16 million financial savings accounts and 19 million credit score accounts. Till 2019, the financial institution operated in El Salvador, which lately declared that it will settle for Bitcoin as authorized tender.

A shot throughout the bows

The authorities’ warning was a uncommon rebuke for Salinas Plíego, who’s Mexico’s third-richest man, and a detailed enterprise ally of President Andrés Manuel López Obrador; Banco Azteca was given a contract to deal with cash-transfer playing cards for the federal government’s anti-poverty applications. 

Salinas Plíego has a web price of $12.9 billion according to Forbes, amassed after he based retail and media conglomerate Grupo Salinas. However the bulk of his fortune comes from his stake in Grupo Elektra, a house home equipment retailer that makes use of Banco Azteca to promote loans to lower-middle-class Mexicans.

In 2005, the US Securities and Trade Fee charged TV Azteca, one other Salinas enterprise, with trying to hide a $109 million windfall via the undisclosed sale of TV Azteca inventory. The case was settled in September 2006 when Salinas Plíego agreed to pay the SEC $7.5 million in penalties and compensation. 

He was additionally allegedly the main beneficiary of a invoice, submitted in 2020 by López Obrador’s Morena get together, to make the central financial institution purchase up U.S. {dollars} from the nation’s non-public banks. 

Banco Azteca is reportedly having a tough time disposing of {dollars}, as a consequence of heightened cash laundering considerations. The invoice was quashed after central financial institution officers objected to it.

Whereas Mexico pushes again in opposition to Bitcoin, one other Central American state, El Salvador, will introduce its new Bitcoin Legislation on September 7. El Salvador now appears set to be the primary state to enact such laws, however cryptocurrency proponents in different nations are having a tricky time following swimsuit.

Source link