Cryptocurrencies News: Mexico’s central bank and the country’s finance ministry have announced that financial institutions are not allowed to use cryptocurrencies.
Mexican financial regulators have joined other financial watchdogs around the world to act firmly against cryptocurrencies like Bitcoin.
Financial institutions banned from using cryptocurrencies
According to Bloomberg; The Bank of Mexico (Banxico) and the Mexican Ministry of Finance, as well as the country’s banking regulator, have not allowed financial institutions to trade or offer services based on cryptocurrencies such as Bitcoin.
The announcement comes a day after Mexican billionaire businessman Ricardo Salinas Pliego said his bank (Banco Azteca) was on track to accept virtual assets.
However, this was quickly answered by Mexican officials, who said that conducting and offering unauthorized operations with crypto assets would be seen as a violation of regulation and that a company could be subject to sanctions.
“Not a legal payment tool”
“Virtual assets are not legal tender in Mexico and are not currencies in the current legal framework,” authorities said on Monday.
Mexican authorities also reiterated their warnings about the risks of using cryptocurrencies as a medium of exchange, store of value or an investment.
Officials stated that Mexican financial institutions are not allowed to trade in Bitcoin, Ethereum, XRP and other cryptocurrencies in order to maintain a healthy distance between virtual assets and the financial system.
Earlier, rating agency Fitch had warned of greater risks for banks due to the El Salvador law making Bitcoin legal in the country.
The World Bank rejected El Salvador’s request.
Shortly after El Salvador became the first country to legally accept Bitcoin, the World Bank rejected a request from the South American country to help implement the move due to concerns over transparency and the environmental impact of Bitcoin mining.
Mexico is not the only country to act against cryptocurrencies.
Bitcoin’s value dropped dramatically after China promised to crack down on crypto mining in the country. Last year, China accounted for 65 percent of all Bitcoin production worldwide.
The People’s Bank of China has also recently called on a number of major banks to explain that they should not offer crypto-related services.
Warning from England
In the UK, Bank of England (BoE) Governor Andrew Bailey said last month that cryptocurrencies “have no real value” and that people should only buy crypto if they are prepared to lose all their money.
BoE chief Bailey then went a step further, adding that cryptocurrencies and similar assets pose a danger to the public.
He also warned that the Bank of England in September 2014 could pose a threat to financial stability in the UK if widespread adoption of Bitcoin were to occur.