Mexican fintech company Amero-Isatek is planning to open several physical cryptocurrency exchanges across Mexico. The move comes after the adoption of new regulations on cryptocurrency in Mexico and using Bitcoin for international payments.
Physical exchanges could help stimulate the local crypto market since regulators allow organisations to operate in physical locations under a “sandbox” legal framework for fintech companies.
Mexico had previously made a name for itself as a cryptocurrency paradise since users could buy Bitcoin easily even without a bank account. However, new rules for cryptocurrency in Mexico are an attempt to limit money laundering and counter financing terrorism.
The legal framework may even become more rigid as Banxico, Mexico’s Central Bank, is planning further fintech regulations.
Banxico wants control over cryptocurrency in Mexico
The Mexican Central Bank recently published several suggestions to regulate the fintech sector that shook the crypto ecosystem. The bank aims to separate cryptocurrency transactions from traditional financial transactions.
This rule restricts the activity of cryptocurrency exchanges, making it almost impossible for users to exchange crypto assets for fiat.
On top of that, the institution is also looking to gain control over companies that manage cryptocurrencies and digital assets. This is meant to prevent valuable assets from leaving the country in places where Banxico and the Mexican authorities have no control over the funds.
Banxico representatives justify the move by stating that they’re looking to develop the crypto sector inside the country and monitor any illegal activity on the blockchain. However, it seems that they don’t understand how cryptocurrency exchanges operate at a global level.
This is not the first time the Central Bank of Mexico has tried to control how exchanges collaborate with local banks. Banxico has been officially in charge of regulating the cryptocurrency sector since September 2018. And these new laws will limit the access of cryptocurrency exchanges to the Mexican banking system.
The Mexican Central Bank has been enforcing general fintech regulations on the crypto sector without adapting them to the market. However, representatives are apparently open to discussing the new changes before committing them to law.
Physical locations that comply with the law
Against this uncertain panorama, Amero-Isatek aims to take advantage of the law enabling fintech companies with a physical location to operate under a sandbox regulatory setup. The exchange will launch eight physical cryptocurrency exchanges in Mexico. The first will open in Nuevo León, Monterrey in June 2019.
The company plans to expand into another seven locations in the Mexican states of Jalisco, Queretáro, Quintana Roo, Sinaloa, South Lower California, and Yucatán.
Alfonso Jiménez, CEO of Amero-Isatek, stated that the company will be the first to launch physical exchanges for cryptocurrency in Mexico. The chosen locations should serve the majority of the 800,000 or so cryptocurrency traders in the country.
The physical exchanges will use Amero
Together with physical cryptocurrency exchanges, the fintech company is planning the launch of a new cryptocurrency in Mexico. The digital coin will be available in all eight physical locations.
The coin released by Amero-Isatek is called Amero and is a stablecoin backed by environmentally-friendly reserves.
The new digital currency has already been used in the largest real estate transaction using cryptocurrency in Mexico. Amero-Isatek bought a property in Cabo Pulmo, Baja California Sur for the price of $280 million in Ameros.
Plan B to counter Banxico rules
If moving towards physical cryptocurrency exchanges doesn’t help Amero-Isatek to comply with Mexican regulations, the group has a plan B in place. The company has also expressed its intentions to buy two cryptocurrency exchanges registered in Estonia.
By purchasing Global XVC and Invest Global, Amero-Isatek will be able to carry out financial operations even without Banxico’s blessing. Both exchanges are registered for cryptocurrency management, and users can buy and sell cryptocurrencies. These international crypto exchanges would provide Mexican users with a guarantee that the company would continue to operate globally despite the Central Bank’s rigid rules.
For now though, Amero-Isatek is a Mexico-based blockchain company registered as a “fintech enterprise with an ecological bent”. Depending on the evolution of Mexican laws, the company could change its slogan to “fintech with financial operations”, Jiménez explained.
Physical cryptocurrency exchanges take advantage of a law that allows a “sandbox” regulatory framework for fintech companies with a physical location. With this move, the Mexican blockchain-based company Amero-Isatek plans to counter the latest rules pushed through by the Central Bank.
The eight physical exchanges should facilitate access to Bitcoin and other cryptocurrencies (including Amero) for 800,000 traders. But if the attempt fails, the company has a plan B up its sleeve with two Estonian registered exchanges.