Tauros, a brand-new Mexican cryptocurrency exchange, recently opened its doors to the public. And it’s offering more than your average fiat-to-crypto exchange. Tauros comes complete with a crypto debit card for the Mexican market. The card can be ordered from the Tauros platform, but there’s a caveat.
The official launch of the platform and debit card took place at the beginning of this month. However, that was one full week after the deadline for fintech companies to comply with new regulations on crowdfunding, electronic payments, and operations involving cryptocurrencies.
The Fintech Law issued by the Bank of Mexico in March 2018 doesn’t encourage the use of cryptocurrencies on a large scale. So, it remains to be seen how Tauros plans to navigate these legal obstacles and achieve compliance to facilitate payments in cryptocurrency.
The Tauros crypto debit card is not available yet
For now, the Tauros debit card only supports payments and transactions in Mexican pesos – the national fiat currency of Mexico. However, the company claims that its new crypto features will be available in the coming months.
According to the Mexican publication El Universal, Tauros will allow users to keep their funds in both USD and digital assets, as well as pesos. This information has been confirmed by Tauros CEO Salvador Meléndez, who stated that new banking services shouldn’t be 100% digital. Instead, they should also allow users to decide which currency to save their money in.
It all sounds great on paper and on the company’s website. However, for now at least, Tauros and its crypto debit card remain pending regulatory approval. And since you can sign up for an account with just an email address and zero compliance checks; it seems unlikely that the company will work its way around the country’s tough new laws.
Meléndez remains hopeful, however, stating that existing laws see cryptocurrencies as a “means of storage or value transfer”. According to him, the legal definition leaves enough room for payments to be made using digital coins.
Mexicans are interested in cryptocurrencies
The Mexican economy is weaker than previously estimated, and inflation has been somewhat reducing its citizens’ purchasing power. Bitcoin and other cryptocurrencies may provide an appealing alternative in such a climate, as we’ve seen in countries like Venezuela.
On top of that, people in Mexico have shown an increased interest in cryptocurrencies over the past few years. In January 2019, 5.9% of Mexican internet users owned cryptocurrencies. That may not sound like a lot, but it’s higher than the average global rate of 5.5%.
For those in the know, Bitcoin and other cryptocurrencies could be a cost-effective way of avoiding banks. In a country where half the population doesn’t have a bank account and isn’t interested in opening one, this may make a lot of sense.
Mexico also has 11 active Bitcoin ATMs where people can buy digital assets with cash. If a company like Tauros could somehow push its crypto debit card through, it could make adoption even easier, by allowing people to receive money and spend it without involving banks.
That seems like a stretch at this juncture though. Cryptocurrencies are regulated in Mexico and the latest Fintech Law won’t make it easy for the Tauros’ crypto debit card to actually come to market.
A law harsh on fintech providers
Even PayPal has decided to step back and remove some of its financial services from the Mexican market. Instead of filing for compliance, the payments giant decided to eliminate its e-wallets to the disadvantage of its users.
From now on, Mexicans can no longer hold money on the platform and PayPal will transfer all funds directly to users’ bank accounts. This operation automatically converts any foreign currency into pesos, that continue to lose strength against the USD.
This is a severe blow to many people who live off of remittances. In 2018, Mexicans living abroad sent a massive $33.4 billion back home. Fintech companies that could have streamlined international transfers have become more limited by the latest legislation and people are being forced to return to banking services and their high fees.
If everything goes ahead as described on its website, Tauros could fill a major gap in the remittance market. According to its platform, people can buy cryptocurrencies and transfer funds in seconds without needing to involve a bank. Users can then spend these funds directly from their digital accounts using their cryptocurrency debit card.
However, its timing seems to be woefully bad and it looks unlikely that Tauros will convince the Bank of Mexico that payments with a crypto debit card should be possible.