Mexico, under proposed legislation, would regulate the fast growing sector of financial technology that includes companies using cryptocurrency such as bitcoin, to protect the consumer and spur on competition.
The proposed new bill, which this month President Enrique Pena Nieto said would be unveiled before September 20 in the Senate, will have a goal of ensuring financial stability as well as defending against financing extremists and money laundering.
The new legislation would add Mexico to a small list of nations, including Britain and the United States that have sought ways to regulate Fintech companies.
Financial services companies envision huge potential growth in the No. 2 economy in Latin America through reaching over 50% of the close to 120 million people in Mexico that do not have bank accounts.
The legislation recognizes the big need in a sector that is as dynamic as the technological innovation for a regulatory framework allowing authorities to lessen the risks and to allow for a competitive environment that would spur on growth, said the draft of the bill.
The proposed legislation said it aims to set up a clear set or rules and lower costs for users. That should be a driver for competition in an area that includes payment companies and crowd-funders said the draft.
The bill is also proposing measures that would regulate companies using virtual currencies such as bitcoin, though it did not provide that much detail. The Mexican central bank would act as the referee for such operations said the document.
The proposed new legislation will be review first by an outside commission, and then be submitted to the Senate to be voted on. If the bill is approved by the Senate, finer details then would be discussed and put into secondary laws.
The regulation represents positive news for all businesses in the sector because there will be more growth as a result of clearer rules, said a president of a crowdfunding company in Mexico City.
Another source in the industry, who did not want to reveal his identity since he was consulted in relation to drafting the legislations, said that Mexico was Latin America’s fastest growing market for fintechs.
He added that the country has just 50 companies in the industry as recently as 2015, increased to 158 during 2016 and there are already more than 240 in 2017.