Wednesday, July 10, 2019

Financial Supervisor says that Libra from Facebook could operate today in Mexico

A senior official of the National Banking and Securities Commission (CNBV) of Mexico said that, with the current regulation, the Libra cryptocurrency of Facebook could legally operate in that country. The statement corresponds to Rocío Robles, who declared in the framework of the Blockchain Summit Latam 2019, according to the local environment El Economista.

Robles, who serves as director of Supervision of Financial Technology Institutions and Novel Models, said that the issuance, use and exchange of cryptocurrencies are not yet regulated by the fintech law This allows individuals to carry out this type of activity in Mexico; otherwise, banks and companies in the financial technology or fintech sector .

It should be remembered that at the beginning of March, the Bank of Mexico (Banxico), entrusted by the fintech law to regulate operations with cryptocurrencies, issued a set of provisions in this regard. Among them, one that restricts the use of cryptocurrencies to the internal operations of financial services companies and cryptocurrency exchange houses .

The official of the CNBV believes that "Libra could arise in Mexico today with the regulation as it is", although it did not rule out that Banxico decides at some point to place controls on the cryptocurrency of Facebook. This is due to the massive exposure that the cryptocurrency would have, given the volume of users of the social network.

Since Libra is such an incipient project, we still can not determine if there is a risk or not. The authorities do not regulate by regulating, but they do so because there is a risk to the public, to the payment system or to the stability of the financial system and if any of these risks are detected then it will analyze what measures are put in place to mitigate them.
Rocío Robles, CNBV, Mexico.

The Banxico provisions generated adverse reactions from actors in the ecosystem. Representatives of the cryptocurrency industry pointed out that the regulations prohibit many of the use cases , including the sending of remittances from abroad. Also, legal experts qualified these rules as contrary to the fintech law itself and even unconstitutional.

The banking authority made a public consultation on the regulations, which closed on June 5 , and currently reviews the comments received. However, in a recent statement, the governor of Banxico, Alejandro Díaz de León, said there must be a "healthy distance" between the Mexican financial system and cryptocurrencies.

For its part, the cryptocurrency of Facebook, which is still in an early stage of development, set off the alarms of several institutions of financial regulation at the global level. The main concern comes from the privacy of the financial data of the future users of Libra, given the background of Facebook.