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Banco Azteca Spurs Mexico to Ban Cryptocurrency Officially

Banco Azteca
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EDITOR NOTE: It’s hard not to think that there’s some form of criminality operating on both sides of the fence when it comes to Mexico, Banco Azteca and the cryptomarkets. First off, Mexico is home to some of the most powerful and vicious drug cartels in the world. The cryptomarkets naturally present a perfect means by which to launder money. On the other hand, if Mexico’s monetary environment and banking system are deemed unsuitable for the demands of everyday life by its law-abiding citizens, then any well-intentioned efforts to find a better alternative, no matter how foolish it may be (as cryptocurrencies are), will be considered illegitimate, and potentially illegal. It’s as if there’s no other choice than a corrupt, albeit legal, fiat system or virtually “illegal” digital assets. For most citizens, the solution would be to hold physical silver and gold. Precious metals don’t make for an efficient money laundering system. Plus, precious metals possess intrinsic value and price consistency, attributes that cryptocurrencies lack. However, if precious metals begin competing with the Mexican peso, will the government begin limiting metals purchases, or will it entertain the possibility of confiscation? 

A top Mexican official reiterated on Monday a ban on the use of cryptocurrencies in the country’s financial system.

Arturo Herrera, Mexico’s finance minister, said cryptocurrencies aren’t legal tender assets and aren’t treated as currencies within the country’s current regulatory framework. 

Those bans are not expected to be lifted in the short term, Herrera said during a presentation to the Financial Action Task Force, a global anti-money laundering group.

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The announcement comes after a Sunday pronouncement by billionaire Ricardo Salinas Pliego, a noted bitcoin (BTC, -2.85%) bull, that he was working to make Banco Azteca the first bank in Mexico to accept the cryptocurrency. Salinas is chairman of Grupo Salinas, the bank’s parent company.

The three entities reiterated the warnings they issued in 2014, 2017 and 2019 about crypto’s risks as a form of exchange, store of value or other form of investment. 

In addition, the document said that financial institutions in Mexico are not authorized to deal with virtual assets such as bitcoin, ether (ETH, -1.33%)XRP (-6.3%) and others, “in order to maintain a healthy distance between these and the financial system.”

Financial institutions that conduct or offer operations with virtual assets without an authorization will be in violation of the regulations and subject to applicable sanctions, the report added.

Mexico is the headquarters of Bitso, the largest cryptocurrency exchange in Latin America. In May, the company raised $250 million in its Series C funding round and reached a $2.2 billion valuation.

The statement on Monday affirms that the government has not authorized the collection of deposits from the general public “through technological schemes related to blockchain or distributed registries, known as stablecoins.”

In May, Bitso CEO Sergio Vogel said on CoinDesk TV’s “First Mover” program the exchange, which has 2 million users, has seen a sharp increase in demand for dollar-linked stablecoins.

Bitso didn’t immediately respond to CoinDesk’s requests for comment.

Originally posted on Coindesk

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