Mexico Central Bank Guns Down Billionaire’s Plan to Bring Bitcoin to Banking Institutions
In recent development, Mexico’s Central Bank released a statement that Bitcoin won’t be considered a legal tender in the country’s financial system. This decision comes within a week of Latin American nation El Salvador passing the Bitcoin Law and making bitcoin a legal tender.
The apex financial institution released a report announcing “This country's financial institutions are not authorized to conduct or offer to the public transactions with virtual assets like Bitcoin. Whoever issues or offers such instruments will be held responsible for violating those rules and will be subject to the applicable sanctions”.
With this decision, the Bank of Mexico has poured cold water on the recent statements and plans announced by Mexican billionaire Ricardo Salinas Pliego of introducing Bitcoin to his own banking business Banco Azteca.
On Sunday, June 27, Mexican billionaire businessman Salinas Pliego commented on his social media accounts that Bitcoin is a good investment. He said his Banco Azteca (a subsidiary of Grupo Salinas ) could be the first lender in the country to do business in bitcoin. He also added that they are finding out ways to allow the public to buy the cryptocurrency.
"Bitcoin is a good way to diversify your investment portfolio and I think every investor should study cryptocurrencies and their future," Salinas Pliego wrote. "At Banco Azteca, we are working to bring them to our customers and continue promoting freedom".
The financial authorities repeat their warnings on the risks deep-rooted with the use of so-called virtual assets. They also pointed out the volatility of cryptocurrencies and the fact they are not backed by any government. Investments or exchanges of any crypto like Bitcoin, Ether, XRP are not authorized by the nation's central bank. The central bank also added that these policies aren't likely to change anytime soon.
The recent decision from the Bank of Mexico is a surprise to the crypto community. Over the last few weeks, Mexican lawmakers voiced their opinion of following the El Salvador route of getting Bitcoin legally in the country’s financial system.
This recent turnaround of events could possibly hold back other Latin American companies from rushing through the Bitcoin decision. The economic downturn with the COVID-19 pandemic has resulted into severe inflation in most of the Latin American nations. Investors have been thus moving their money into assets like Bitcoin to prevent their capital from deflating further.